In a letter to Eva Kylie, a member of the European Parliament and a prominent cryptocurrency advocate, The current president of the European Central Bank, Mario Draghi, shared his views on cryptocurrencies and their future in the banking sector.
The letter states that the European systemCentral Banks (ESCB) monitors the development of the financial sector and seeks an unbiased look at new technologies that meet their goals.
Stablecoins May Be Better
Draghi notes that the Central Bank is currently studyingthe potential of digital assets and stablecoins in the context of “monetary policy, security and efficiency of payments, market infrastructure and stability of the financial system”. Moreover, Draghi separately mentioned Libra as a new stablecoin model that has a chance of mass distribution, thanks to the support of large technology companies. However, Libra still needs the approval of countries like France.
At the moment, the European Central Bankbelieves that stablecoins have a limited scope due to the nature of their functioning. At the same time, Draghi noted that, given the rapid pace of innovation in this area and the evolution of business models, the situation may soon change.
Draghi also clarified the position of the G7 stablecoins working group, noting that coins played an important role in identifying problems with cross-border payments and the availability of payment systems.
Still, stablecoins have their own risk factors, including “related to the impact on monetary policy, financial stability and the stable operation of the global payment system”.
In conclusion, the head of the ECB emphasizes that the views of individual central banks may be influenced by political issues.
Public digital euro
In addition, the ESCB is actively exploring the possibility ofrelease of the digital version of the euro. Draghi explained that the constraining factor at this stage is not the technical aspect, but rather the benefit of the digital coin in terms of cost-benefit ratio for the society. The Central Bank is already introducing new technologies to expedite settlements and cross-border payments, such as the TARGET Instant Payment Settlement Service (TIPS) .
Draghi will leave his post on November 1, 201. The former head of the IMF, Christine Lagarde, will take his place. It is not yet clear how a change of leadership will affect the position of the European Central Bank. However, given Lagarde's recent comments, it can be assumed that she is aware of the potential of the new technology.