Europe anticipates economic war between the US and China by depending on the digital Euro
The European Union is accelerating its steps to issue its own digital currency, with the increase in tensions between the United States and China, in order to protect the economies of its countries from falling prey to the monopoly of the two global powers on digital payment tools.
Europe fears of an economic war between China and the US, as if this war unleashed, potential risks will big on the European continent.
US media quoted the chief economist of the German “LBBW” bank, as saying: “The European Central Bank is concerned that the Eurozone will end up in a geopolitical and economic situation between major technology companies in the United States and payment systems in China without the digital Euro”.
Discussions have been taking place within the European Union regarding the feasibility of the digital Euro since 2021.
Last November, the President of the European Central Bank, Christine Lagarde, said that the entry of major technology companies in the United States and China into the digital currency payment system may place Europe under the influence of one of the two countries, because it doesn’t have a unified digital currency to pay with.
It also pointed out at the time that all digital foreign currencies that Europe uses are based outside the continent, such as the American MasterCard, PayPal, the Chinese Ali Pay” and UnionPay.
This means that in the event of a crisis, it may find itself unable to compete and purchase the technology required for its industry.
European economic experts reached for conclusion as fearing of war between China and the US is for real due to the following reasons:
- The growing use of cryptocurrency payments within the technology markets.
- Most technology companies now receive digital currencies in most of their dealings from the US and China, the countries that use these currencies the most.
- The situation is similar to Europe’s dependence on Russian gas, and everyone sensed the danger that Europe faced after the lack of Russian gas supplies to it after the Ukrainian crisis.
- Europe’s dependence on US or Chinese digital currencies increases the risk of technological paralysis that may hit its factories if the conflict develops into mutual sanctions affecting payment methods in known currencies, such as the recent crisis between the US dollar and the Russian ruble.
- The digital Euro will preserve Europe’s financial sovereignty away from these tensions, especially if matters come to the outbreak of a long-term Chinese-US conflict.
Europe might refuse to issue these currencies, because many of its countries already has strong and stable digital payment systems like France.
The European banks have warned against issuing these currencies before setting a framework that guarantees their preservation within banks so that bank deposits within them do not erode and expose them to bankruptcy, because digital currencies can be saved in electronic wallets through websites on the Internet away from banks.
The ECB had previously stated that a digital euro is an electronic version of euro notes and coins, and would complement fiat currencies.
It’ll also be an official currency guaranteed by the European Central Bank, and it will enter the speculative market of digital currencies such as Bitcoin, and its value will be determined in US dollars.
The digital euro amounts will be issued or transferred, as happens with the Bitcoin, and the records of Blockchain accounts, and the Blockchain system as a whole will be used in the transfer and issuance.
As for payment and deposit operations, individuals will be allowed for the first time to deposit directly with the European Bank, and individuals and companies will be allowed to make daily payment operations in a fast, easy and secure manner.