The Digital Euro Association released a new report on March 6. She talks about the usefulness of stablecoins for machine-to-machine (M2M) payment. She explains that M2M payment is an area ripe for development. The report outlines how stablecoins could make Europe the world leader in the development of the Internet of Things (IoT). The association believes that this type of asset could help Europe to remain competitive on digital, in the absence of a CBDC.
Could stablecoins validly replace a CBDC in Europe?
The EU had announced in July 2022 that MiCA regulations would govern the issuance of stablecoins. Now the Digital Euro Association is talking about the benefits these assets would have in Europe once the regulations are in place. The association said stablecoins have several use cases for M2M payment (automated micropayments). She explained that the latter could become a more developed area thanks to these digital assets.
It turns out that the M2M payment has a great utility in professional, industrial and domestic environments. For example, it could facilitate the payment of handling charges for shipping containers. This payment type also has use cases for supply chain or cloud storage fees, for example. But the current problem is that its implementation involves the superposition of several application programming interfaces (API).
It appears that stablecoins solve this problem, through their ability to reduce or even eliminate intermediaries. These types of digital assets can also support greater scalability of M2M payment systems. It also eliminates human error as well as counters usability and security issues associated with APIs.
Furthermore, the report of the Digital Euro Association argued : “Outside of accessing DeFi markets, typical use cases for stablecoins have focused on improving financial inclusion or lowering the costs of cross-border remittances, which may not be. so convincing in a European context“.
It turns out that the European Central Bank overlooked M2M payments in the design of the digital euro. The Digital Euro Association report states: “It is important that regulators foster the growth of M2M payments, as this is key to maintaining the global competitiveness of Europe’s digital economy“.
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