European Union Ponders Issuing a Public Digital Currency to Compete With Facebook’s Libra

The European Central Bank (ECB) has recently considered the idea of issuing its public digital currency via a new draft document, according to Reuters. This is seen as a response against the Facebook backed project, as the company’s upcoming launch of the Libra has made regulators all over the world wary.

Since Facebook shared plans to launch Libra, countries such as Germany and France affirmed that the new initiative could pose real risks to the financial sector. They decided that creating their own alternative could be a great idea to protect the economy from this massive project or the threat of China's digital currency.

Before Libra, it was easy to ignore stablecoins as they were tiny, but something of this magnitude could change the global economy forever.

In this new draft, the union says that countries should adopt a “common approach” to cryptos and that the ECB should explore the idea of creating a public digital asset for the European Union. Now, the draft is set to be discussed this Friday by regulators before they decide to move it forward or shelve it.

Benoit Coeure, a board member of the ECB, was quoted by Reuters. According to him, the public institution should “step up” on its plans for a public digital currency, so that local users could use electronic cash and ditch bank accounts and paper notes.

Such a project would be met with opposition from banks, as they would lose a lot of their money, so it will probably be a long time before the whole thing is greenlit.