The Digital Euro: A Journey Through the Hurdles of Central Bank Currency

Where There’s a Will, There’s a (Virtual) Way

In a recent roundtable called “Upgrading Money to the Digital Age: Introducing Digital Euro,” experts from various European banks came together to discuss the future of currency, and let’s just say the outlook isn’t exactly crystal clear. Experts reveal that we might be looking at a proof of concept for a digital euro that is at least four or five years down the road. Apparently, getting everyone on the same page is tougher than getting a cat to take a bath.

Timing Is Everything

Austėja Šostakaitė from the European Central Bank (ECB) dropped a tiny bombshell during the panel. She stated that the ECB won’t be making any serious decisions about pursuing a digital euro until about mid-2021. Imagine the rush you feel at a buffet when you realize you won’t get to the prime rib anytime soon. You start wondering, how long can I hold out for that juicy slice of meat?

Circle of Trust: Central Banks and Commercial Money

Diving deeper into the discussion, Šostakaitė pointedly asked, “How do we introduce euro into the ecosystem and how does it collaborate with commercial bank money?” It’s kind of like trying to introduce your old dog to a brand new puppy. Sure, they eventually get along, but there might be a few awkward growls and a lot of sniffing involved before that happy moment comes.

Sweden’s Playbook: The E-Krona Saga

Across the North Sea, Carl Andreas Claussen, an advisor to the Swedish Riksbank, mentioned they’re in the final stages of testing their e-krona, with completion set for February. However, he echoed that launching this digital currency will also take around four or five years. Why the delay, you ask? Claussen stressed that there are legal implications and the need for political support: “We can’t decide on this alone. We need a committee to sort it all out.” It sounds suspiciously like needing a ‘team-building retreat’ to figure out who’s bringing what snacks.

Competitors in the Ring: The Global Race for CBDCs

Šostakaitė highlighted that competition might just expedite the digital euro project. If the world witnesses foreign CBDCs or even Facebook’s digital ambitions in the Eurozone, things may accelerate. It’s like watching the Olympics—once someone breaks the record, everyone wants to get in on the action. And with Facebook eyeing a January launch of its dollar-pegged stablecoin, the pressure may just push the ECB to speed up its digital currency plans.