Corrado Passera is calling for a digital euro to be introduced as soon as possible in order to guarantee the European Union not only its monetary sovereignty, but also to maintain its leading role with respect to China and the United States.
He said this in a long interview with the Huffington Post.
Who is Corrado Passera
Corrado Passera is one of the most important banking executives in Italy. In the past, he was managing director of the Olivetti Group and one of the founders of the Omnitel telephone company (which later became Vodafone). He was also CEO of Poste Italiane, an Italian company that provides postal and financial services.
He is currently the founder and manager of Illimity Bank, a bank that defines itself as “high-tech”. And it was precisely about innovation that he spoke in the long article in the Huffington Post.
He also has a past in politics as a “super-minister” in the Monti government in Italy, where he led the ministries of Economic Development and Infrastructure and Transport.
The digital euro according to Corrado Passera
According to Corrado Passera, the European Union must speed up the release of the digital euro. The risk is that users will turn to the private sector, and specifically to stablecoins. But above all, at a time when China is one step away from releasing its digital yuan, Europe risks being left behind.
These are his words:
“The Digital Euro: it is needed and it is needed now. It is needed to unleash enormous opportunities, but above all, it is needed because without it we will hardly be able to defend our monetary sovereignty, and therefore also our economic and political sovereignty. We would also risk significantly weakening Europe’s geopolitical role. China is ready, and soon the US will be too. Whoever is left behind is lost, in the literal sense of the term”.
Competition from stablecoins
The former Italian minister also talks about cryptocurrencies and stablecoins in particular, raising at least a couple of doubts:
- they are not really convertible into legal currencies as their reserves are limited compared to the tokens in circulation;
- they do not offer legal protection.
But the real problem with stablecoins is that if they were recognized, the companies issuing them would in fact be real banks with their own currency. This undermines the monetary sovereignty of the authorities. In addition, they pose privacy risks if they are issued by big tech companies, as in the case of Facebook with Diem.
The digital euro is also a response to these challenges.
Corrado Passera calls it an accelerator of innovation and also a geopolitical tool.
The digital euro in the geopolitical arena
According to Passera, CBDCs will become an instrument of competition between countries. The point is that China is one step away from releasing its own digital state currency (CBDC). In recent days, the download of the wallet for e-CMY has started, although only for some cities. The United States may also soon accelerate its digital dollar. The European Union must not be left behind if it does not want to lose its weight on the world economic stage. The Italian banker says in this regard:
“If the Euro remained the only major non-digital currency, its value and the role of the European Union itself would be at risk”.
CBDC in the world, where we are
Indeed, it is true that China is about to release its digital currency, probably before or after the Beijing Olympics which will be another large-scale test. But the US is further behind the EU in the implementation of its CBDC. At the moment, in Europe the implementation of the technology is also being studied and tested. But according to ECB President Christine Lagarde, it could still take at least four years.
The United States is still at a preliminary stage of the study. Of course, with the help of big tech and the many payment giants at their disposal, one can be sure that if they wanted to, the US could launch the digital dollar in no time.
But for the moment China is ahead of everyone and overtaking it is impossible. When the Digital Yuan emerges from the test phase and becomes a full-fledged currency, the effect it will have, both inside and outside the country’s borders, will be clear.
Its acceptance and diffusion beyond China could convince Europe and the United States not to wait any longer. Because, as Corrado Passera himself says:
“Tomorrow may be late”.
Source: https://en.cryptonomist.ch/2022/01/14/corrado-passera-illimity-bank-digital-euro/