With Germany’s Bundesbank remaining skeptical of the European Central Bank’s (ECB) move to put out a digital euro. ECB’s officials have attempted to put out the flame of doubt coming from the Germans. ECB board member Fabio Panetta, and official Ulrich Bindseil explained how interest rates would not be a problem for people trying to save when the digital euro is launched. According to them:
The ECB is by no means planning to use a digital euro to enforce interest rates that are significantly more negative. As long as there is cash, it will always be able to be held at an interest rate of zero percent.
The two ECB officials further explained how the digital euro would not interfere with bank deposits’ actions. They indicated that it was more of a move to make sure that the Eurozone has an edge against international companies and that they would now have the means to interact with them financially. They state:
We have to prevent European payment transactions from being dominated by providers outside Europe, such as global technology giants who will offer art currencies in the future. […] By preparing for a digital euro, we are also securing the autonomy of Europe. It is a safeguard in the event that undesirable scenarios occur.
Germany Wants ECB to Step up Digital Euro Project
Previously, the German Finance Minister, Olaf Scholz had warned the EU about stepping up its game when it comes to the issue of the digital euro. The minister had criticized Facebook-backed Stablecoin, Diem, has a “sheep in wolf clothing” and that the German authorities were not going to approve its usage within their jurisdiction.
China leads the pack when it comes to development of a national digital currency. The Asian country has undergone different test phases to see how the digital asset can be integrated into its economy.