There is a world of difference between public and private digital currencies. In the eyes of many, both are mutually exclusive in terms of catering to the same market. The European Commission seems to have a contrarian view regarding these matters.
Public or Private Digital Currencies?
Approaching the concept of digital currencies can be done in many different ways. It is something central banks and governments are showing an increasing interest in. Especially the ECB made it apparent that a digital euro may be in the works already. This will clearly serve as a public digital currency, as it will co-exist alongside the physical euro.
According to European Commission’s Eric Ducoulombier, private companies can play a key role in this regard. More specifically, he hopes that CBDCs will not prevent private efforts from making their mark on the digital currency industry. After all, there is plenty of room to collaborate, rather than out-compete one another.
In Europe, it appears the digital euro will benefit from private sector opportunities. Although no confirmed efforts have been announced yet, there is some interest in exploring this option. Digital payments are becoming more prominent across the European continent. Exploring digital currencies may be worthwhile at this time.
Fostering progress by EU institutions or the European Commission will require complementarity. Tools and projects built by the private sector need to be compatible with public services. That may lead to one part of the market being dominated by private efforts, whereas the other part is in the hands of public-oriented projects.
COVID-19 Forces Collaboration
It is safe to say there have been some serious changes in the European financial landscape. With the “help” of COVID-19, the demand for digital payment solutions has never been greater. Payment trends are shifting as well, and may pave the way for digital currencies.
Although there is a lot of talk about a digital euro, one cannot ignore cryptocurrencies either. These are the primary public-facing digital payment options people can use today. Bitcoin does not require approval or support from any financial institution or government. It empowers users to be in control of their own financial destiny.