European Central Bank Exploring Creation of Stablecoin
BRUSSELS - The European Central Bank (ECB), the protocol team behind the Euro, is exploring the potential of creating a stablecoin to act as a safe haven from the volatility that has negatively impacted much of the European economy.
As macro headwinds continue to batter the prices of most Altcoin projects, The European Central Bank is looking to flip the narrative.
In a recent article titled Bitcoin’s Last Stand, the European Central Bank attempted to hit back at the narrative being pushed by Bitcoin maximalists that many altcoins are merely ponzi schemes that lack product market fit.
Pushing back on this narrative, the ECB delivered some tough criticisms of Bitcoin noting that “speculative bubbles rely on new money flowing in” before continuing to say “and the difference between the ECB doubling our money supply in 2020 and Bitcoin price increasing is that you can claim little pieces of paper with our Euro logo on it, can you claim real world Bitcoin paper, we think not!”
However, with the ongoing energy crisis, out of control inflation and multiple nation states considering ditching the Euro; it’s clear the ECB needs to do more than write OpEds.
“We are actively researching how we might use algorithms to build a stablecoin token” ECB President Christine Lagarde noted in a recent interview.
While many projects like MakerDAO have relied on a basket of tokens to act as collateral for their stablecoin, Lagarde pushed back on this idea “to have a collateralized stablecoin we’d first need collateral, that’s a non-starter for the ECB.”
To find a stablecoin solution that might better fit the ECB’s goals, President Lagarde has recently authorized the use of external consultants, most notably Terraform Labs.
According to sources that have visibility on this project, the ECB is expected to release a beta version of their stablecoin on testnet sometime in late 2023.