According to a European Central Bank executive, the European Union plans to launch its own central bank digital currency for the European bloc as early as 2026.
In a speech last month at Columbia University, Fabio Panetta, an exec at the European Central Bank, said that the euro area is 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.
Panetta said earlier this year that Europeans were likely to be more receptive to a digital euro that could be used in stores or online transactions. He said that making the digital euro legal tender and available for peer-to- peer payment methods would increase adoption.
Panetta was quick to point out thatcryptocurrencies had unique challenges, despite claims that they are a trustworthy form of currency free from public control, but they are too risky to act as a reliable means of payment. They behave more like speculative assets and raise a number of public policy and financial stability concerns. Recent developments in the market for cryptocurrencies illustrate that it is an illusion to believe that private instruments can act as money when they cannot be converted into public money at all times, Panetta said.
Panetta concerned about more volatility and risks in the stable coin market, with Panetta saying stable coin is vulnerable to runs and still full of risks.