As the debate intensifies over stablecoins,
particularly those championed by figures like Donald Trump for their potential
to streamline corporate transactions, European economists and corporate
treasurers are proposing an alternative. Anton Brender and Gérard Soularue
argue that Europe should instead invest in a system that transforms traditional
bank deposits into digital tokens, offering a distinct path forward for digital
payments.
PARIS — In an unexpected ripple effect, the
potential return of Donald Trump to the White House could accelerate Europe's
journey towards a digital euro. Driven by a president who has become a
proponent of cryptocurrencies, the U.S. Congress has passed legislation
establishing a regulatory framework for digital assets. Among these, the stablecoin has emerged as a central focus in discussions
about the future of payments.
Born from the volatile world of cryptocurrencies, a stablecoin is a digital token designed to maintain a perfect
peg with the U.S. dollar. For this reason, it already presents an alternative
to the traditional greenback for transferring money across the globe or
protecting savings. Resembling a digital dollar bill, it circulates without
necessarily passing through traditional banks. Its issuers sell their tokens
for dollars; they don't create new money but rather substitute it with a
digital token.
Leveraging distributed ledger technology, these
tokens can be transferred instantly and at low cost, and can even be programmed
to execute pre-established clauses under certain conditions. Tokens can indeed
carry additional information. Even though they may not have legal tender status
(no one is obliged to accept them as payment), their potential could appeal to
businesses.
Accelerated Push for a Digital Euro
The prospect of dollar-denominated stablecoins penetrating the European payments space, already
dominated by American card networks, has spurred the push towards a digital
euro. However, Europe's approach differs fundamentally: it is centered on the
European Central Bank (ECB) rather than private actors. The American business
model is challenging to import into Europe; issuing tokens to invest the
proceeds of their sale short-term holds less appeal in a region where interest
rates have long been low or even negative.
Unlike a stablecoin, which merely "resembles" a dollar
bill, a digital euro issued by the ECB would be the equivalent of a 1-euro
banknote, endowed with legal tender status. This distinction emphasizes a
foundational difference in monetary philosophy and control.
This European vision for tokenized bank deposits
presents a compelling alternative to privately issued stablecoins, underscoring
a strategic choice to maintain central bank oversight and public trust in the
evolving landscape of digital currency.
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