Christine Lagarde warned of the risks of a hasty launch of the digital Euro for the Bank of EuropeDavid Kemp
The Bank of Europe is developing a digital Euro. Experts note the systemic risks of a coin with a stable value. Therefore, the launch of the coin may be delayed until better times. This statement was made by Christine Lagarde during her first speech as ECB President.
Bank of Europe and the creation of the digital Euro
The cryptocurrency of the European Central Bank will bring it to a fundamentally new level, it will affect the stability of the global financial system. A fixed-value coin can interrupt the regulator's feedback to banks, which is represented by incoming reports. As a result, the financial institution will lose its planning and forecasting capabilities.
Christine Lagarde noted, "We have many questions about the digital Euro, and further analysis is required to improve its design."
The President of the Bank of Europe has put forward an initiative to test the banking system, develop transfers between banks and implement them in the future based on distributed ledger technology. MS Lagarde put forward an opinion, "In the future, we will be able to ensure compatibility of our cryptocurrency and similar products of other Central banks."
Lagarde emphasized that the Bank of Europe cooperates with regulators and international bodies, it is reviewing the system for monitoring stablecoins, taking into account the features of advanced assets.
The European Union has prompted the Bank of Europe to develop its own digital currency
The ECB should explore the possibility of issuing its digital currency. This assumption is stated in the draft document developed by the Finnish representation in the European Union. The statement said: "The Bank of Europe and other EU Central Banks could explore the potential and difficulties of issuing cryptocurrencies from Central banks. This also applies to specific actions in this direction."
Regulators report on the need to adopt a clear regulatory framework that allows you to conduct activities with digital money. This element can be a ban on digital currencies that have the highest risks.
The Association of German banks has prompted the development of the EU's digital currency
The Association of private banks in Germany consists of more than two hundred financial institutions. It prompted the release of Europe's cryptocurrency. Thanks to it, the EU will be able to successfully compete with the United States and China, and will also reduce the negative consequences of launching the Facebook token. In the article "What is Libra" you can learn a lot about this digital coin.
In its statement, the Association notes that the new asset will operate on the basis of a pan-European payment platform and will be regulated using a single legal framework.
The document says, "Owners of the digital Euro must necessarily pass identification. This requires a European or world standard. In terms of rigidity, it should be the same as for banks and organizations."
The Association said that smart contracts and digital processes were not integrated into the Single Euro payment zone. Therefore, it is necessary to create an infrastructure for implementing new business models.
Thanks to the EU's cryptocurrency, it will be possible to increase the security of the monetary system while private digital currencies, including Libra, enter the market. This will result in significant political and economic conflicts. Thanks to the cryptocurrency of the European Union will maintain its position in the international arena.
The Association stated, "Soon we will be able to actively use digital money. In order to prevent the polarization of the global financial architecture between us and Chinese technological solutions, Europe needs to remain competitive."
German Ministry of Finance on the need to create a digital Euro
Olaf Scholz, who is the head of the German Finance Ministry, believes that the state should not lag behind private companies and countries in terms of cryptocurrency output. He noted, "This payment system will be useful for the financial center of Europe, thanks to it, integration into the global financial system will be accelerated. We can't leave this field for Russia, China, the United States and private players."
The German government is developing a blockchain regulatory strategy that prohibits the issuance of parallel digital currencies, including Libra. The Finance Minister noted, "The main element of the state's sovereignty is the issue of currency. We can't leave this critical area to private organizations."
France initiates the creation of the digital Euro
The head of the French Finance Ministry, Bruno Le Maire, initiated the creation of a digital currency of the European Union. He made this proposal during an informal meeting of European Finance and economic Ministers in Finland. Le Maire said that European States should explore the best ways to increase the speed of international banking operations and make them cheaper within the European Union and outside it.
Le Maire said, "The initiative to create a digital Euro was submitted to the Eurogroup for discussion. It will be studied at the next meeting of the International monetary Fund." The Finance Minister also called for banning the Libra cryptocurrency, which can threaten the monetary independence of countries. Despite this, the CEO of Libra Association assured the community that the company will be able to solve problems with regulators and launch the cryptocurrency in the second half of 2020.
France exempted cryptocurrency traders from taxation before withdrawing money from exchanges
The French authorities plan to tax the income of players on the exchange only at the time of transferring crypto assets to Fiat money. When conducting trading without using Fiat transactions, taxes will not be charged. This statement was made by Bruno Le Maire.
According to the official, when purchasing goods and receiving services when calculating cryptographic currencies, users will be exempt from paying VAT. Portugal has a similar fiscal policy: the conversion of digital currencies to Fiat currencies does not require payment of value added Tax.
The ministries of finance and Central Banks of the EU member States see the need to create a digital Euro. Their statements inspire confidence that the cryptocurrency will be launched in the coming months. Residents of the European Union and visitors to the region will benefit greatly from its use. Therefore, when you see the digital Euro, be sure to consider buying and using it.
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