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Guindos (ECB) calls not to be idly faced with digital currencies to retain monetary sovereignty

MADRID, 5 Sep.

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Guindos (ECB) calls not to be idly faced with digital currencies to retain monetary sovereignty


The vice president of the European Central Bank (ECB), Luis de Guindos, pointed out this Tuesday at a conference on monetary sovereignty that the European Union "cannot sit idly by" in the face of digital currencies nor can the ECB risk being displaced from its role as a "lender of last resort".

"In the absence of CBDCs (central bank-issued digital currencies), it can be argued that private and foreign digital currencies could crowd out domestic currencies such as the euro, threatening central banks' monetary policy and their ability as lender of last resort. ", explained the former Spanish Minister of Economy.

De Guindos has recognized that the digitization of the financial world "has widened" the payment possibilities, since the 'fintechs' and the big technology companies have joined the payment market.

However, the vice president of the ECB has stated that "the crypto universe evolved and exploded", so CBDCs can function as an antithesis to this phenomenon and be "an anchor of stability" for the monetary and payment system against "possible disruptions". "Europe cannot afford to sit idly by when others move on," he said.

However, De Guindos has warned that if CBDCs are allowed to be widely used for international payments, "the attractiveness of the euro" could be called into question, which would expose the common currency to alternatives such as bitcoin or stablecoins. '. "In short, this would endanger our monetary sovereignty," he summarized.

In a similar sense, last Thursday De Guindos referred to the digital euro to ensure that it will be a payment method, not an investment, useful to 'keep crypto assets and stablecoins' at bay.

Likewise, he recalled that cash will not disappear, since there are countries like Germany where the paco with coins and bills has a notable presence or because of the potential constitutional amendment that is intended to be introduced in Austria to shield its circulation.