The European journey for cryptocurrencies has been quite dull, slow, and even uncertain at times. Compared to other regions like Asia and South America, Europe has stayed quite cold and unexplored in terms of digital currencies.
However, recent developments in Europe are quite encouraging for the crypto space. Recently, the European Central Bank (ECB) official, Vitas Vasiliauskas, discussed the benefits of Central Bank Digital Currencies (CBDC). The entire talk, which happened on April 12, was published by the ECB on May 27.
While speaking at the Reinventing Bretton Woods Committee Conference, Vasiliauskas said,
The CBDC would be a novel type of central bank money. Although also digital, it should be distinguished a traditional reserve account. The CBDC would also be fundamentally different from private crypto assets. This is because it would be- money! It would serve as a medium of exchange, a means of payment and a store of value, just like the current forms of central bank money.
Vasiliauskas is the Chairman of Bank of Lithuania (BoL), which is a member of the ECB’s Governing Council. He further added that the amount of cash inflow worldwide. This, he said, could mean that every single person would need to have an account with an entity to make payments, and that could lead to financial exclusion. Vasiliauskas believes that CBDCs would ensure that people have continued access to central bank money.
BoL Chairman not only mentioned the benefits but also raised concerns about the use of CBDC. He stated that CBDC might make the overleap of policy rates to deposit and lending rates strong. And on the other hand, it CBDC might also increase bottomed constraints, which could make digging deep possible.
A lot has been happening in Europe for the past few months, which seems to be quite favorable for the crypto markets. For instance, a new European Union blockchain group is all set to be introduced with ripple, SWIFT onboard. The ECB also published a report on cryptocurrencies, which claimed that digital currencies are not a threat to financial stability.