The De Nederlandsche Bank (DNB) is stepping up to bring digital euro, becoming the first monetary regulator in the Eurozone to start developing a central bank digital currency (CBDC).
In a detailed report published on Tuesday, the Dutch central bank mentioned the benefits of smart contracts in the development of a CBDC and is also willing to lead Europe’s efforts to study and develop a digital euro.
“If the decision should be taken within the Eurosystem to experiment with some more concrete type of CBDC, we are ready to play a leading role. The Netherlands provides a suitable testing ground for such an experiment,” the central bank stated (translated from Dutch).
The world is in the need of digitization
In Europe, the development of a digital version of the euro has become a hot topic of discussion among the central banks, however, none was moving forward towards the development.
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According to the central bank, the Dutch people are minimizing the use of cash day-by-day and now only one-third of all the transactions are made in cash.
The 45-page report also mentioned the threats on the fiat by the digital currencies, especially Facebook-proposed Libra. The regulator believes that “private digital money” like Libra can fill this cashless gap unless people are offered with a digital public money alternative.
When the European regulators are still looking into the prospect of digital currency, their counterparts in Sweden and South Korea are already moving ahead with trials of CBDCs. However, both the central banks made it clear that they are only experimenting with the concept and took no decision on the launch of such digital fiats.
Meanwhile, the Chinese central bank is at the forefront of launching a CBDC and has decided to distribute the digital yuan among local government employees next month.