Francesco Canepa and Balaz Collany
Frankfurt (Reuters) – The European Central Bank hopes President Donald Trump’s plan to support cryptocurrencies pinned in the US dollar will speed up legislative support for the digital euro, ECB board member Piero -Cypolone told Reuters.
The ECB has presented digital currency, an online wallet, partly guaranteed by central banks, as an electronic payment instrument independent of dominant US providers such as Visa and PayPal.
Cipollone said Trump’s support for globally available Stablecoins tied to the dollar will help create yet another US payment tool and add urgency to the digital euro project.
The European Commission proposed the Digital Euro Act in June 2023, but not much occurred amidst the skepticism from some lawmakers and bankers.
“The political world is more wary of this,” Sipolone said in an interview Wednesday. “And we could see acceleration in the process.”
Cipollone hoped that the EU parliament and council would close work on digital euro law before the summer and pave the way for negotiations with the committee.
This leaves room for new rules to be finalised by November, when ECB policymakers will vote on whether to launch digital currency.
“The political process is complicated and there’s a lot to do with the table,” Cipollone said. “The sooner it is, obviously the better, but we fully understand their needs.”
When asked about the timeline by Reuters, EU MP Marcus Farber said Parliament may at best have a report prepared by summer.
Like money market funds, stubcoins offer short-term interest rates in their official currency, but can also be used to pay.
Cipollone said the widespread use of US stubcoin as a means of payment is “worried” as it threatened to divert deposits from European banks.
“If Europeans start paying using stubcoins, they’ll transfer their deposits from Europe to the US, given that most of them are on US and dollar basis,” he says. Ta.
Bankers fear that the digital euro will equally empty their assets.
To address these concerns, the ECB said the holdings would close at probably thousands of euros and would not be paid.
Nigeria, Jamaica and the Bahamas have already launched central bank digital currency (CBDC), with 44 more countries running the pilots, including Russia, China, Australia and Brazil, according to the Atlantic Council think tank.
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