Sep 30, 2020 at 14:55 UTCUpdated Sep 30, 2020 at 15:40 UTC.Geopolitical jostling accelerated by large-scale private stablecoin initiatives like libra, plus an added dose of COVID-19, means we are now facing a perfect storm for central bank digital currencies.
Such tectonic shifts are being acknowledged by big players like Deutsche Bank, the latest lender to issue a report on CBDCs and their looming impact.
"CBDC has the potential to challenge the primacy of the U.S. dollar," Heinz said.
So what's Europe's position in this digital currency cold war? Earlier this month, European Central Bank President Christine Lagarde said at a conference in Germany that Europe has fallen behind the competition when it comes to CBDCs.
A digital euro, which would not replace cash but complement it, is needed to keep Europe at the cutting edge of innovation and to provide an alternative to private digital currency initiatives like libra, Lagarde added in a speech last week.
Stepping back, the Deutsche Bank report reminds us that changes to the dominant global reserve currency are a historical recurrence.
The difference today is that it's not just the dominance of the dollar, it's the dominance of U.S.-centric infrastructure and technology in payment systems, said Rashid Hoosenally, CEO of Lacero, a builder of infrastructure connecting digital assets to regular businesses.
CBDC could be the next front in a technology-based cold war, which has included things like the Google tax, and in which regard it's not at all surprising to find that Europe appears to be more outraged than anyone over Facebook's libra plans.
Smith did refer to the arrangement regarding America and Europe, as well as many other places as something of a loveless marriage, citing as an example U.S.-imposed sanctions on Iran."The U.S. walked away from the Iran agreement. Europe hasn't and would like to do some trade with Iran, but they are being bullied by the U.S. Treasury," said Smith.
The situation regarding CBDCs on the global stage is not about being anti-American, or anti-Chinese, said Marc Taverner, INATBA's executive director.
CBDCs Could Challenge US Dollar's Dominance: Deutsche Bank
Published on Sep 30, 2020
by Coindesk | Published on Coinage
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