The consensus-backed e-money recipient, Monerium, believes the path to digital euro is easier than what the European Central Bank suggests.
Fintech, which focuses on bridging the gap between paper money and blockchain by issuing programmable digital money, published a response to the European Central Bank’s recent public advice on the digital euro on October 13.
In the summer of 2019, Monerium became the first company in the world to obtain a license from Icelandic regulators under the new European regulatory framework for e-money services across the European Economic Area. He introduced paper payment services using the Ethereum blockchain and later became a protocol partner of the Algorand blockchain.
In its response, the European Central Bank Monerium argues that all Europe needs to do is admit that it already has a “proven form of digital euro”.
In 2000, the European Commission described electronic money as a “digital alternative to cash” and issued a directive defining it as “technically neutral” and an “electronic alternative to coins and banknotes”. In light of this concept, Monerium states:
“The only thing the European Central Bank will have to do to give electronic money a similar status to physical money is to give electronic money exporters access to the ECB’s reserves.”
According to Monerium, access to two existing electronic money sources is better than the European Central Bank, which issues digital currency directly to households and non-financial businesses. Direct emissions will necessitate a fundamental overhaul of the current system, as the central bank mainly interacts with regulated financial institutions such as commercial banks.
To support this, Monerium cites a report from two economists at the International Monetary Fund, which suggested that non-bank service providers could issue digital money with support from the central bank to spread the central bank’s artificial digital currency (sCBDC).
According to Monerium, the current structure of electronic money in Europe already meets the main IMF standards for a stable digital currency. The IMF-led shift from electronic money to sCBDC will require the central bank to provide electronic money exporters with access to ECB reserves:
“Such access would be consistent with maintaining” a level playing field between e-money and credit institutions “as stipulated in the Electronic Funds Directive.
As reported, the European Central Bank has indicated that it will decide whether to launch the digital euro project by mid-2021.
The European Central Bank’s October 2020 report outlines scenarios and requirements for the future of the digital euro. Most importantly, the central bank views the central bank’s currency as an issue of “strategic autonomy” for the eurozone at a time when stable currencies threaten private and foreign players to “undermine financial stability and monetary sovereignty in the eurozone”.