Cryptocurrencies planned by technology giants could damage financial system

Cryptocurrencies planned by technology giants could damage financial system

Cryptocurrencies planned by global technology giants such as Facebook could damage Europe's financial system, warned Fabio Panetta, a member of the Executive Board of the European Central Bank (ECB). "Large technology companies can pose a major risk from an economic and social perspective and can reduce rather than expand consumer choice alternatives," Panetta said. "While they may offer an appropriate and efficient payment solution, they can also jeopardize competition, privacy, financial stability and even monetary sovereignty." Panett's warning comes at a time when the pandemic of the new coronavirus has accelerated the shift towards cashless and digital payments, which he said will continue after the end of the corona crisis. The ECB is currently exploring the possibilities of introducing the digital euro, which it is also trying to discuss with the public. Panetta has previously supported the digital euro as a way to strengthen the financial sovereignty of the European Union (EU). According to the Panett, Europe must avoid being dependent on foreign operators for cashless payments, which would "harm competition". The European Commission presented a cryptocurrency control plan in September. It includes rules that would restrict projects such as Facebook's Libra digital currency project. "No global asset-backed cryptoactive may operate in the EU until regulatory and supervisory challenges and the risks associated with it have been adequately identified and addressed," the European Commission said. French Finance Minister Bruno Le Maire thinks the ECB is the only institution that "can issue currency".