70 Economists Urge EU to Back Public Digital Euro

Seventy economists have appealed to the European Union to prioritize a public digital currency. The group issued a warning regarding the potential impact of private stablecoins and foreign payment companies on Europe's financial autonomy.

Their collective statement argues that a public digital euro is necessary to protect the region's monetary sovereignty. They believe that without a state-backed alternative, the continent risks ceding control of its financial infrastructure to private entities whose interests may not align with the public good.

A group of seventy economists has formally addressed the European Union regarding the future of digital currency in the region. The economists are advocating for a digital euro that remains under public control. They argue that the current landscape is increasingly dominated by private stablecoins and foreign payment firms. These entities, they claim, operate with primary interests that may conflict with the economic stability of Europe.

The core of their argument centers on the concept of monetary sovereignty. This refers to a nation's or region's ability to conduct its own monetary policy without external interference. The economists warn that if private digital currencies become widespread, the European Central Bank could lose its grip on the economy. This loss of control could affect everything from interest rates to the stability of the banking system.

The economists identified specific threats posed by the unchecked growth of private digital assets. They highlighted the risks associated with foreign payment firms that currently process a vast volume of transactions within Europe. These firms operate largely outside the direct regulatory reach of the EU, creating a vulnerability in the financial system.

The letter outlines several potential dangers if the EU does not act:

• Loss of control over monetary policy implementation.
• Reduced ability to monitor and prevent financial crimes.
• Fragmentation of the single market if multiple private currencies emerge.
• Transfer of economic power to non-European corporations.

By urging the EU to back a public digital euro, the economists are proposing a safeguard. They believe a state-sanctioned digital currency would ensure that the benefits of digital finance remain within the public domain.

The central theme of the economists' appeal is the need for the public interest to prevail. This concept suggests that financial infrastructure should serve the citizens and the economy first, rather than shareholders of private companies. The economists argue that a digital euro issued by the central bank would guarantee universal access to a secure and efficient payment method.

Unlike private stablecoins, which are pegged to assets like the US dollar or managed by corporate entities, a public digital euro would be a direct liability of the central bank. This provides a level of security and trust that private alternatives cannot match. The economists stress that the design of this system must be open and inclusive, preventing the creation of walled gardens that restrict competition and consumer choice.

The intervention by seventy economists adds significant weight to the ongoing debate within the European Union. It highlights the urgency of establishing a clear regulatory framework for digital currencies. The debate is not merely technical; it is fundamentally about the economic future of the continent.

If the EU follows the economists' advice, it could accelerate the timeline for a digital euro. This would position Europe as a leader in sovereign digital currency technology. Conversely, failure to act could lead to a fragmented financial ecosystem where foreign entities dictate the terms of trade and finance. The economists' message is clear: the window for decisive action is open, but it may not remain so indefinitely.