Last Updated on June 4, 2021 by Jason
A report from a European Central Bank has highlighted the risk to countries who choose to not develop a digital currency for their central bank, otherwise known as a CBDC.
This is because cross-border and domestic payments could become dominated by providers that aren’t domestic. Complete market dominance of a private currency, like Facebook’s Libra, now known as Diem, could leave businesses and consumers at risk if it threatens the financial system’s stability in general.
The report says that ‘issuing a CBDC would help to maintain the autonomy of domestic payment systems and the international use of a currency in a digital world’.
It would also increase the credibility of the currency that it is translated into, if it is taken on by countries whose own currency isn’t as stable.
The European Commission have been talking about launching a digital European currency since the beginning of the year, claiming that one could be off the ground in as little as four years.