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"No real money" - ECB director sees Terra debacle as point victory for digital euro

 


Fabio Panetta, one of the directors of the European Central Bank (ECB), has promised that the digital euro could be launched within the next four years. He also sees the debacle surrounding the algorithmic stablecoin Terra as proof of the superiority of a central bank digital currency (CBDC).


The ECB Director made the relevant statements during a speech at the National College of Ireland on Monday . Here, Panetta initially stated that the first practical tests with the digital euro could start as early as 2023. However, this test phase can take up to three years. In this respect, he points out that the recognition of the digital currency as an official currency and its usability as a peer-to-peer (P2P) means of payment could be important drivers for widespread adoption. The actual design of the digital euro is therefore of crucial importance.


In his speech, Panetta also commented on the recent drama surrounding the stablecoin TerraUSD (UST), which, due to its decoupling from the US dollar, has triggered a veritable domino effect on the entire crypto market, which has also affected market leader Bitcoin ( BTC ) and many other projects has drawn. The ECB director emphasizes that stablecoins such as Tether ( USDT ) are by no means "risk-free", rather they would be subject to the same risks as other cryptocurrencies.


“Current developments on the crypto market show that it is a misconception that private financial instruments are real money, because they cannot be exchanged for government money at any time. Although cryptocurrencies are always claimed to be a reliable form of money that escapes government control, the truth is that they are far too risky to function as reliable payment tools. Rather, they are speculative investment products that pose a number of problems for politics and financial stability.”


Other official EU bodies say that the legal basis for a digital euro could be created within the next five years. In March, Panetta argued that acceptance of a European digital currency would increase if the digital version of the euro could be used as an everyday means of payment, making it imperative that it be integrated into physical stores and online commerce .

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