The European Central Bank (ECB) is accelerating its work on a digital euro, with a budget of 1.3 billion euros. For its part, bitcoin attracts new followers every day, seduced by the radical decentralization of this crypto. But the digital euro and bitcoin embody two opposing conceptions of what money is.
The digital euro, a state currency under control
With the digital euro, the ECB wants to adapt the currency to digital payments, while maintaining close control. Use would be limited, with transaction capping. And the data could be exploited for monetary policy purposes.
The digital euro therefore remains a state currency, where trust rests in the issuing institute. Citizens have no say in the rules or development of this currency, which are entirely decided by the ECB.
Bitcoin, a radical questioning of currency
Conversely, bitcoin embodies a complete paradigm shift compared to traditional currencies. No central authority controls the issuance or rules of bitcoin.
The trust is based on a decentralized open source protocol, maintained by an international community. Each user can participate in the governance of bitcoin by freely choosing the rules that govern their money.
Bitcoin is even designed to resist any attempt at control by a state or a central bank. Its value is based on a consensus between participants, and not on a centralized issuing institute.
Two visions of the monetary future
Through the digital euro and bitcoin, two radically opposed visions of the monetary future clash.
On the one hand, central banks like the ECB seek to maintain their state control over currency, by adapting it to the digital age.
On the other hand, decentralized currencies like bitcoin challenge this model to give control to the users themselves.
It is still unclear which approach will be necessary in the long term. But the contrast between these two possible futures could not be more marked.
Either our currencies remain decided centrally by state institutions. Either they become self-regulated decentralized protocols, where trust comes from the users themselves.
Through the digital euro and bitcoin, two radically opposed visions of the monetary future clash. The ECB defends the state currency model in the face of a profound challenge brought by decentralized cryptocurrencies such as bitcoin. Whatever the outcome of this debate, there is no doubt that the crypto bitcoin will have played a decisive role in this questioning of the very nature of money in the digital age.
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