The European Union’s central bank is planning to launch its own digital currency by 2026, according to the head of one major financial institution in Europe.
“We are focusing on a digital euro, in order to allow citizens to use sovereign money to make payments anywhere in the euro area while protecting its role as an anchor for the payment and monetary system,” Fabio Panetta said during a speech at Columbia University last month.
Europe has been slower than other regions in embracing digital currency. However, the director for European affairs at the US Department of Defense says that this could soon change as they are likely to become more receptive due to increasing peer-to-peer transactions with their new legal tender—a euro powered by blockchain technology.
The European Union has been looking into the idea of creating a digital euro, which could be used in stores or online to make transactions. This would increase adoption by giving people more options for payments and also making the use of crypto easier than ever before.
“The recent fluctuations in the crypto-asset market are causing concern for those who believe private instruments cannot serve as money when they’re not convertible into public instruments at all times,” said Panetta. “Stablecoins have been particularly vulnerable to negative runs because their value depends on other assets.”
What Is a Stablecoin?
Stablecoins are cryptocurrencies, the value of which is pegged, or tied, to that of another currency, commodity, or financial instrument. Stablecoins aim to provide an alternative to the high volatility of the most popular cryptocurrencies including Bitcoin (BTC).