A revolution Digital in the financial sector continues to advance, and with it arises several challenges and opportunities that cannot be ignored.
The European Central Bank (ECB) has issued a warning regarding the growing role of stablecoins such as Tether (USDT) and PayPal's recent foray into the world of dollar-backed cryptocurrencies. The message is clear: the need to create a Digital Euro is urgent to protect the sovereignty European finance.
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The rise of Stablecoins and the ECB’s concern
While many Central Banks evaluate Bitcoin cautiously due to its high volatility, stablecoins backed by fiat currencies, such as the dollar, have gained prominence. Companies like PayPal have entered this market, launching their own cryptocurrencies, which raises concerns for the ECB.
ECB Director Fabio Panetta highlighted the need to create a Digital Euro in a recent statement. He warned about the risks of private companies like PayPal gaining a dominant position in a field traditionally controlled by the state.
Although the PayPal be mentioned, other companies such as Tether (USDT) also play a significant role in this scenario.
(Image: CoinMarketCap/reproduction)
Tether, launched in 2014, quickly became one of the largest holders of US Treasury bonds, considered the safest assets in the world.
Its dominance extends to the cryptocurrency industry, with trading volume almost double that of Bitcoin on several exchanges.
Risks and benefits of Stablecoins
Stablecoins backed by fiat currencies, especially the dollar, offer 24/7, international transactions with little bureaucracy. This makes them attractive in countries affected by inflation, such as Argentina and Turkey.
However, the ECB and other central banks are concerned about the threat these “private currencies” pose to monetary sovereignty and financial market control.
Fabio Panetta emphasized that the creation of a Digital Euro is essential to prevent private players from dominating the digital payments market.
He noted that unlike stablecoins issued by tech giants, a Digital Euro would be distributed by banks and payment service providers, maintaining the relationship with customers. This would help maintain some control over the financial system.
The race for digital currencies
While the ECB calls for the creation of the Digital Euro, other countries, such as Brazil, China and Russia, are already leading the race to develop their own digital currencies. Some of them are in advanced testing phases.
The battle between the private sector and Central Banks for leadership in the digital currency revolution is far from over.
The creation of sovereign digital currencies is seen as crucial to maintaining financial control and autonomy in an increasingly digital world.
Europe now faces the challenge of accelerating the development of the Digital Euro to remain at the forefront of innovation financial.
