Scholz Asks to Accelerate the Rollout of Digital Euro

The central bank digital currency (CBDC) is one of the hottest topics of the year, thanks, in a bad way, to the COVID-19 pandemic that has reduced the use of cash dramatically. First reluctant, the European central banks and financial authorities are now in a hurry to introduce a new digital payments vehicle. 

Table of contents: 

1. The issue of CBDC can’t be put on the backburner. 

2. In the race for dominance over global markets.

The issue of CBDC can’t be put on the backburner

On November 27, Olaf Scholz, the finance minister of Germany, said during the press conference, which took place after the virtual G20 summit meeting, that the European financial authorities must put the pedal to the metal in the matters that concern the launch of digital euro. The reason for such hastiness being an enormous demand for the more convenient and efficient digital money, coming from European businesses and their customers.

Just a quick reminder that the central bank digital currencies (CBDC) represent digital assets, built on the foundation of blockchain, the value of which is tied to the physical assets owned by a central bank, thus bearing a lot of similarity to banknotes.  

Sholz noted that the European Central Bank, and the central banks of most countries, are exploring the options with regard to the proper introduction of their own digital currencies, as well as the role of these currencies in facilitating domestic and cross-border payments.

In the race for dominance over global markets 

The minister said that he is convinced that the Europeans must “work very hard” on finding a solution that would allow for the introduction of digital currencies in the nearest possible future because the current situation is not the one where the authorities could allow themselves to “wait and see.” Such a hurriedness on the part of the German minister is understandable since the economic superpowers are now literally competing against each other for control over the global market through such an innovative instrument as CBDC. It is believed by many financial experts that the central bank digital currencies could set the new and improved standards for domestic and global payments that will be carried out entirely via the Internet, with the possibility of making offline payments. 

At the same time, other countries like Russia aren’t standing on the sidelines either. The Russian financial regulator has recently admitted to having a great interest in the central bank currencies and deemed them as a viable solution in the face of the ceaseless development of fintech and e-commerce that was further instigated by the ravaging pandemic that gave rise to the demand for online payments. However, the International Monetary Fund (IMF) warned the financial authorities against the forced introduction of CBDC, at least until a clear legal framework is being established.