Germany’s Finance Minister and Vice-Chancellor Olaf Scholz upheld his claim for a digital euro, taking a jab Facebook’s digital currency Libra, at the same time.
With the internet revolutionizing the way we communicate, the radically-evolving technologies are challenging the way money could work for us in the future. From hard cash to electronic cards and now cryptocurrencies, today’s financial technology is all about making payments platform more user-friendly. But will this mean an end for fiat money? No, they would metamorphosize into digital forms.
The idea behind digital euro
Thus, the concept of a national digital currency has gained momentum in the last couple of years, with China’s state-backed cryptocurrency leading the movement. Along the same lines, the European Central Bank is also studying the implications of a national cryptocurrency, which would essentially allow people to store their digital holdings at the central bank and use it for payments and transactions.
A digital euro is supposed to empower people with more freedom of usage and less of implied public subsidies.
German minister backs digital euro
Supporting the general idea of how technology can assist us in refashioning the existing monetary system, Germany’s Finance Minister, Olaf Scholz, said in an interview with a local news outlet WirtschaftsWoche on Oct 03, that an electronic version of euro is precisely what Europe needs as it would massively benefit the financial center of the region.
According to him, a digital euro will broaden the scope of the currency and help to put the euro back on the financial world map.
Scholz skeptical about Project Libra
Last month, Germany approved a bill that involved a blockchain strategy curtailing the growth of parallel currencies in the country. Grabbing the opportunity to take a dig at Facebook’s close-to-heart yet highly criticized Project Libra, Scholz insisted that private companies must not control the issuance of currencies.
It is entirely the government’s responsibility to make monetary system changes, and thus, issuing a currency falls under the jurisdiction of the state and not private organizations like Facebook, he urged. Per him, Germany should take the lead in the development of national digital currencies, much before China, Russia, or the US could catch up.
Meanwhile, the US lawmakers have sought clarification from the Federal Reserve regarding launching its own digital US dollar, compliant with the central bank’s framework. Far up in the east, China is ready to roll out its digital version of its native currency anytime this year.