Calls for the Digital Euro are increasing with warnings that Europe could fall behind other parts of the world that are advanceing their CBDCs.
In many parts of the world, the demand for official digital currency is increasing. There are already more than a few countries working on different versions of a central bank digital currency (CBDC). While none is already publicly in use by residents, many are already in the testing stage. In the same vein, Europe is trying to accelerate plans for the Digital Euro.
According to BdB, a private banking association in Germany, European authorities should begin to introduce a digital euro. BdB’s chief executive Andreas Krautscheid has said that these authorities should abandon all of their “hesitation and philosophizing”, and make concrete plans to properly develop and issue a Digital Euro.
Plans for the Digital Euro
The BdB has also said that the German government should stand up to this task. The association recently released a report dubbed “Europe’s answer to scales: potential and conditions of a programmable euro”, the association suggests that any delay will put Germany at a disadvantage.
“Germany threatens to lose its competitive advantage if we do not soon create an interoperable digital euro that can also be used to create smart contracts.”
At the moment, the European Central Bank (ECB) is evaluating the possibility of the Digital Euro. The agency currently has a team researching all of the possible opportunities and risks incurrable, from issuing a Digital Euro. However, there is no exact plan to begin the actual development or issuance of the asset. Regardless, Italy has shown significant interest.
Is IOTA Suitable?
In a recent announcement, IOTA revealed its new IOTA Coloured Coins (ICC), in the ongoing Chrysalis phase 2. Based on the IOTA Tangle, ICCs are coins that can easily be used to represent other assets from the real world. IOTA describes this process of assignation as “coloring”.
The ICC is effective in digitizing to digitize traditional assets or other kinds of property. This could include real estate, land, title deeds, corporate bonds, shares, and quite possibly the Digital Euro.
Before now, Sweden already began testing its own digital currency, known as the e-krona. IOTA had initially applied to Swedish authorities to handle the e-Krona. At the time, IOTA reached the final round of the pitch with competitors. However, Sweden went with tech company Accenture.
According to the Bank of France, in a recent report, there are a few blockchains that could be a good platform for the Digital Euro. The report does not exactly encourage but mentions both Ripple and Ethereum blockchains. The report says:
“Since the attributes of a unit of the wholesale CBDC (file representing the currency unit, keys enabling use) may be integrated in a cryptoasset circulating on another blockchain, which is possible on Ethereum and Ripple, for example, it would then become possible to use the unit on this blockchain.”
Currently, there is nothing to point in the direction of IOTA or the ICCs, for the Digital Euro. However, IOTA could make a play for the CBDC, and possibly streamline the process for the ECB and other European authorities.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.