Digital Euro Will 'Protect' Eurozone From Foreign Issuers, Says ECB Exec

Oct 2, 2020 at 09:34 UTCUpdated Oct 2, 2020 at 14:09 UTC.An executive at the European Central Bank has said a future digital euro initiative could save the eurozone from relying on digital currencies issued by foreign entities.

In a post on Friday, ECB executive member Fabio Panetta, formerly head of the Italian central bank, said the envisioned aim of a central bank digital currency would be to "Preserve the public good that the euro provides to citizens."

A digital euro would also ensure foreign-based issuers, whether that's other central banks or private companies, don't become too integral to the eurozone's stability - something that could even threaten the ECB's monetary sovereignty.

The post comes as the central bank releases its report into the proposed digital euro.

Running to 54 pages, the paper argues CBDCs stand to provide citizens with a "Risk-free" form of money, unlike cryptocurrencies and private stablecoins, which could require users to surrender their financial privacy to for-profit entities.

It would also offer citizens easier access to a payment method, thereby improving financial inclusion.

The report also touches on the theme of protecting the eurozone's monetary sovereignty: A digital euro could ensure "Strategic autonomy" for the bloc, as well as bolster the euro's international standing as a reserve currency.

The worry that, just like with the tech giants, the European Union could end up relying on foreign providers for payments, has been palpable across the continent over the past year.

ECB President Christine Lagarde said in Germany last month that the EU had fallen behind countries like China in CBDC development.

More directly, France's economic and finance minister, Bruno Le Maire, said last year Facebook's libra coin actually threatened to undermine the European project.