In a never-before-seen address at the University of California, Berkley published on Wednesday, Olli Rehn, Governor of the Bank of Finland, touted the possibility of a centralized banking digital currency (CBDC) in digital euro working in tandem with fintech solutions. to facilitate cross-border payment for services throughout Europe.
The European Central Bank’s (ECB) investigation into the plausibility of the digital euro began in late 2021 and is expected to end in October 2023. Rehn highlighted the usefulness of the experimental digital euro, saying:
“A digital euro would give people additional choice about how to pay and make it easier to do so in an increasingly digital economy. It would extend the availability of central bank digital currency beyond bank-to-bank transactions to include daily peer-to-peer exchanges, person-to-person payments, covering online shopping as well as brick-and-mortar businesses.”
Rehn argued that privately developed cryptocurrencies are inherently unstable due to the lack of a monetary peg. “Digitalisation makes financial services more efficient, but makes them more vulnerable to cyber-attacks and other forms of cyber-risks,” he said, pointing out that such vulnerabilities to money laundering, financial crime and other illicit activities represent strong reasons for “safe and legal means of payment in the digital age via CBDCs.”
Earlier this month, the ECB identified CBDCs as the best method for cross-border payments on stablecoins and other cryptos. In the report, the ECB criticized the settlement times present in networks such as Bitcoin, saying that the differences in value between initiating and finalizing the transfer make it suitable for large sum transactions.