Private Sector Assets Make European Central Bank Prioritize Digital Euro

Por Cassio J. Krupinsk
Em 28/09/2023

The Digital Euro, the virtual version of the European Union’s fiat currency, is taking increasingly clear forms to become, in a short time, another important advance in the tokenization of assets in world trade.

The studies are advanced and have the strong sponsorship of the European Central Bank (ECB), which has been sympathetic to the proposals that have been drawn up so far to define the structuring of the tokenized euro.

Interest has been growing within the European financial community, especially among governments, due to the advancement of private payment companies and concerns about the monopolization of payments through them.

What will be the next steps to tokenize the euro?

Are we facing another step towards tokenomics?

BLOCKBR, a company that develops tokenization infrastructure, will talk about the monetary revolution in the Eurozone and how it could affect token business!

THE PRIVATE SECTOR DANGER TO CBDC

One of the main focuses of the project to tokenize the euro is the independence of citizens in relation to payment providers, which are growing rapidly in the region – and which are generally not European companies.

This protagonism concerns the economies of the European bloc and, therefore, there is the intention that the digital euro will bring all the advantages of monetary tokens:

The agility with maximum security of blockchain technology;
Management transparency with smart contracts;
Total availability for payments and investments.

The euro token would be an action in the opposite direction, allowing people to choose between physical euros or digital euros without being forced to join private platforms – and thus be able to make cash payments with tokens at no additional cost.

WHAT IS THE STAGE OF THE DIGITAL EURO PROJECT

The proposals for the virtual euro were delivered to the European Community, which will begin the analysis and feasibility and regulatory studies stage. Some of them involve:

Mandatory acceptance as a means of payment;
Confidentiality of citizens’ data, except for data essential for integration into the digital euro system and compliance with regulatory standards;
Possibility to make offline payments;
System balancing tools such as digital token retention limits.

For the ECB, the digital euro is expected to be launched by 2026, but experts believe this should happen from 2028.

HOW IS THE IMPLEMENTATION OF THE BRAZILIAN CBDC GOING?

Brazil has assumed its role at the forefront of tokenization once again and has a very advanced project to implement the digital national currency that already has a name: DREX.

The digital real – as DREX was previously called – was recently tested in the first balance transfer between Banco do Brasil and Caixa, a milestone in the expectation that the entry of Brazilian virtual currency into the economy will occur by the end of 2024.

In common between Brazil, the European Union and several other countries are expectations regarding the many advantages of CBDC for the economy and the monetary system, among which:

COST REDUCTION IN THE MONETARY SYSTEM

A substantial reduction in the use of paper money in circulation is estimated, given the advantages that the use of monetary tokens will bring to people on a daily basis, especially security.

As a result, the government will spend less on issuing, storing and transporting money – expenses that will no longer be charged to the banking system, increasing revenue for banks.

MORE PROFITABILITY IN TRADE AND INVESTMENTS

Blockchain technology combined with smart contracts allows commercial and investment operations in tokenized assets to be carried out without intermediaries and this model will be replicated for the use of a digital fiat currency.

This will reduce costs related to traditional agents in the current process and will allow the savings achieved to be passed on to investors or the prices of goods and services.

DEMOCRATIZATION OF THE MONETARY SYSTEM

National digital currency can eliminate (or greatly reduce) the biggest obstacles for millions (or billions) of people to use banking technology.

The bureaucracy: transacting CBDC will be simple and between virtual wallets of the parties who are negotiating a purchase or service;
Independence: peer-to-peer operations will allow you to use CBDC balances without relying on software and without being subject to bank fees;
Availability: consumers or investors will be able to move CBDCs at any day and time, without limiting transaction times.

IS THE DIGITAL EURO ANOTHER STEP TOWARDS THE TOKENIZED ECONOMY?

Without a doubt, yes.

We are talking about the block of countries that represents a substantial share of the world economy, a mandatory environment for all companies that want to prosper in their business.

Digitizing fiat currency in this context is an important leap towards the popularization of the token. After all, we are talking about the daily use of populations in various regions, not counting the approximately twenty fiat token projects in progress, in addition to Brazil.

In the near future, digital money for people’s daily lives will be a reality in many countries and businesses will be able to benefit from this visibility to invest in transactional tokens and increase the efficiency and profitability of their operations.

To achieve this, it is essential to have a tokenization company like BLOCKBR, with the infrastructure for analysis, issuance, distribution of tokens and governance oriented towards the best results that a tokenized asset can obtain.

Do you know what tokenization infrastructure is and how it is fundamental for business with transactional tokens? Discover BLOCKCBR’s differences!

TOKENIZE YOUR ASSETS WITH BLOCKBR!

Tokenization is a reality that is becoming present in all segments and business models, it is not something so innovative that it should still be seen with suspicion. Companies and individuals are currently monetizing tokens.

Recent actions by BACEN and CVM signal that tokenization is legal and the digital real will be a great divisor to increase the credibility of technology for those who want to invest in digital assets.

Offering your business token is simpler than you might think. Do you want to see the competition come out ahead?

Come and talk to BLOCKBR.

We have the best token offering strategy on the market!

BLOCKBR Digital Assets is a fintech specialized in tokenization of assets and investments that delivers infrastructure to the regulated and non-regulated market through an All-In-One platform that offers the transformation and interoperability between assets and investors.

For more information, visit: http://www.blockbr.com.br or @blockbr_ on social networks