Bitcoin may be falling, but central banks still want in on digital currencies.
On Thursday, the newly-instated President of the European Central Bank, former Chair and Managing Director of the International Monetary Fund Christine Lagarde, said that one of her initial mandates will be to focus on the development of stablecoins.
ECB Wants a Digital Currency, And Fast
Speaking in her debut press conference Thursday, Christine Lagarde said that the ECB under her leadership aims to “get ahead of the curve” when it comes to stablecoin development. She said:
“My personal conviction is that, given the developments we are seeing, not so much in the Bitcoin segment but in the stablecoins projects, and we only know of one at the moment but there are others being explored and underway at the moment. We’d better be ahead of the curve.”
She went on to say that there is clear demand in the world for digital currencies, likely referencing the attempts by companies and countries alike to launch global stablecoins that consume a large portion of global financial activity.
France Likely to be First, Then China
While the ECB is looking to get “ahead of the curve” — whatever that means — it appears that some countries will be beating the monetary organization for the Eurozone to the punch.
The first to beat the ECB seems to be France, which is notably a part of the European Union but is seemingly looking to have its own independent digital asset.
France will seemingly be followed by China, which has been hard at work on a digital money system for years now.
A report from Chinese media Caijing reported earlier this month that the People’s Bank of China, China’s central bank, has partnered with seven state-owned companies — four banks and three telecom giants — to begin testing the digital currency in the cities of Shenzhen and Suzhou. This pilot will purportedly begin next year, and will be focused on integrating the digital currency into industries like transportation, education, and medical care.
Experts expect the full-fledged launch of the digital currency to take place within the coming year. Per previous reports from Blockonomi, Edith Yeung, partner of Proof of Capital — a blockchain-centric venture fund that has made investments in Binance, Blockstream, and Stellar according to its website — told CNBC on November 20th that she believes China’s digital asset will “definitely” launch “within the next six to twelve months.” She further explained:
“It could be quite soon. Even though it seems like the timing is right after Mark Zuckerberg got grilled by Congress, this is something that has been in the works for the past few years.”
Yeung’s assertion that China is on the verge of getting its own cryptocurrency comes shortly after CNBC reported that HCM Capital managing partner Jack Lee believes the PBoC digital currency network could launch within the next two to three months.
U.S. Still Sitting Out
While its contemporaries in the Western world — everyone from France and the E.U. as a whole to Canada and the U.K. — want in on digital currency, the U.S. seems to want to sit this one out.
In a House Financial Services Committee hearing in Washington earlier this month, Treasury Secretary Steven Mnuchin said that he and Federal Reserve Chairman Jerome Powell agree that the U.S. does not need a digital currency “in the next five years.”
It isn’t clear why the U.S. is taking such a cautious approach, though pundits in the cryptocurrency space say that it could hurt the nation’s chances at financial dominance in the future, especially if the E.U. and/or China get their own digital monies up and running.