A plan by the European Union to create a digital version of the euro has been criticised as another sign of the bloc’s obsession with control. The EU says it wants to keep up with advances as cash falls out of favour in some member states where some see notes and coins accounting for as little as 20 percent of transactions.
The European Commission on Wednesday presented its proposal for a digital euro and outlined what the new form of currency might look like.
French MEP Jérôme Rivière, a former National Front member who backed far-right politician Éric Zemmour in France’s 2022 presidential election, wrote in a tweet: “Watch out for abuses!
“At the EU, there is still this obsession with control. With a digital currency, unlike cash, the issuer controls usage and can seize without difficulty.”
Fabio Panetta, Member of the Executive Board of the European Central Bank (ECB), and Valdis Dombrovskis, Executive Vice-President of the European Commission, defended the move.
Facebook’s plan at the end of 2018 to create its own currency has also been credited for shocking central banks into seizing the digital currency initiative.
Libra, which would have been a dollar-backed currency with a stable value, would have been offered to the social media platform’s its two billion odd users to use among themselves. The project was eventually scrapped.
A source at the ECB told French daily Le Monde the idea current financial arrangements could be bypassed and central banks weakened had rung alarm bells.
China has already launched a digital yuan while Britain has plans for a digital pound to enter circulation in the second half of this decade.
The ECB is expected to complete an investigatory phase on the digital euro’s design and distribution in the autumn before it decides whether to look at developing and testing a new digital currency.
Burkhard Balz, an executive board member of Germany’s Bundesbank, said in February that a key aspect which had to be decided was whether a digital euro would have legal tender status, which means it could be used to settle a debt in court, Reuters reported.
In total, 130 countries which account for 98 percent of the global economy are exploring digital versions of their currencies. Almost half are in advanced development, pilot or launch stages, according to research by the US-based Atlantic Council think tank.
It said significant progress in the last six months means all G20 countries, except Argentina, are now in one of those advanced phases.
Additional reporting by Maria Ortega.
