BRUSSELS (Reuters) – Progress on the feasibility of setting up a digital currency, backed by the European Central Bank will be able to be made in the next few months, senior officials said on Friday, warning that the project was facing challenges and was in it for the long term.
FILE PHOTO: a Small toy figures in the painting are to be seen in the representations of the virtual currency, to display the European flag and on the Facebook Scale the logo in this illustration picture, the 20th October 2019 at the latest. REUTERS/dado Ruvic/Picture/File Picture
The plans for a European public, the digital currency started rising after the social media giant Facebook announced that in June its the blueprint of a bathroom Scale, a digital currency, which spooked regulators, who have concerns, and said that Facebook and the project could not be prohibited.
A public cryptocurrency, it would represent an alternative to the bathroom Scales, and other private-sector development projects, and it would also reduce the costs of cross-border transactions, which EU officials see as too high.
Recognizing that it would take some time for the development of a European public-release version of the Scale, the French Finance Minister, Bruno Le Maire also told a news conference in Brussels: “the fact is that, in The long term, this does not take away from the work, and the results are in for the next few years.”
An ECB official told Reuters that the euro zone’s central bank had been concerned with the technical aspects of the digital currency, and it would be further clarification from the European Union, the authorities quickly.
The EU finance ministers discussed the issue at a meeting in Brussels on Friday and are set to adopt a joint statement welcoming the ECB’s work on the topic at the next meeting in December.
The EU’s finance commissioner, Valdis Dombrovskis, said the balance is a “wake-up” call, it was found that there are gaps in the offering, for a quick and cheap cross-border payments in Europe.
The ECB said the official, several options have been explored. In the most ambitious programme for users of the digital currency, was able to open a bank account directly to the bank. That would be transaction costs, but would any of the existing banks and payment services that are largely unnecessary.
Below is a less radical option, and banks have to be given money or tokens provided by the ECB, which they can then distribute to their customers, ” said the official, in spite of the fact that it is a work in progress, and a number of technical and legal challenges have remained the same.
The ECB’s policy-making by the Board of directors will be coming in next week, for the first time under the chairmanship of Christine Lagarde, who replaced Mario Draghi at the beginning of this month.
The official said that in the meeting the issue of a public digital currency is a session dedicated to the challenges of the future.
The debate is, in this phase, the focus is on the question of whether a public cryptocurrency to be feasible or desirable for the official warning.
In a separate interview, Le Maire backed the proposals from the German Finance Minister, Olaf Scholz, to be distinguished from the advancement of a european-wide bank deposit guarantee scheme for the banks’ reduction of exposure to sovereign debt.
“It is not good for the banks, they are German, Dutch, Italian, French, German, or Spanish, and are also exposed to the sovereign debt of their home country,” Le Maire said, stressing the importance of these companies to be covered before the union, it may be the implementation of a joint insurance coverage to the depositors.
A FILE PHOTO of the French Finance Minister, Bruno Le Maire attends a press conference for the kick-off of the French national lottery operator Francaise des Jeux (FDJ) for a list of the opening of the new share subscription process in the city of Boulogne-Billancourt, near Paris, France, on November 7, 2019. REUTERS/Gonzalo Fuentes
The pre-existing national arrangements in the 28 member states of the EU, the coverage of deposits up to 100,000 euros ($110,310), but they may not be sufficient in the event of a major banking crisis.
Le Maire’s comments are likely to irk Italy, whose banks hold a large share of the country’s massive national debt. The Italian Minister of Finance, Roberto Gualtieri, made it clear on Thursday that Rome would not be able to wear Scholz suggest.
A French official said France was worried about the Scholz’s idea of giving a score to the national debt holdings, which would be to the advantage of Italian and French debt to be more expensive for the banks to make their balance sheets.
Reporting by Francesco Guarascio @fraguarascio; Editing by Catherine Evans