The expert and economic analyst, Jihad Adib, agrees with Europe’s fears of the economic war between China and America, explaining in an interview with “Sky News Arabia” the potential risks to the continent..
“The European Central Bank is concerned that the eurozone will end up in a geopolitical and economic situation between major technology companies in the United States and payment systems in China without a digital euro,” US media quoted the chief economist of the German “LBBW” bank as saying.“.
Discussions have been taking place within the European Union regarding the feasibility of the digital euro since 2021, and last November, European Central Bank President Christine Lagarde said that the entry of major technology companies in the United States and China into the digital currency payment system may place Europe under the influence of one of the two countries. Because it does not have a unified digital currency to pay with.
It also pointed out at the time that all digital foreign currencies that Europe uses are based outside the continent, such as the American “MasterCard”, “Faisal Paypal”, the Chinese “Ali Pay” and “UnionPay”; This means that in the event of a crisis, it may find itself unable to compete and purchase the technology required for its manufacture.
legitimate concerns“
Economic analyst Jihad Adib describes Europe’s fears of war between China and America as “very legitimate”, for the following reasons::
- The growing use of cryptocurrency payments within the technology markets.
- Most technology companies now receive digital currencies in most of their dealings from America and China, the countries that use these currencies the most.
- The situation is similar to Europe’s dependence on Russian gas, and everyone sensed the danger that Europe faced after the lack of Russian gas supplies to it after the Ukrainian crisis.
- Europe’s reliance on American or Chinese digital currencies increases the risk of technological paralysis that may hit its factories if the conflict develops into mutual sanctions affecting payment methods in known currencies, such as the recent crisis between the dollar and the ruble..
- The digital euro will preserve Europe’s financial sovereignty away from these tensions, especially if matters come to the outbreak of a long-term Chinese-American conflict..
Obstacles within Europe
At the same time, however, Adeeb warned that countries in Europe might refuse to issue these currencies. Because it has strong and stable digital payment systems like France.
He also pointed out that European banks have warned against issuing these currencies before developing a framework that guarantees their preservation within banks so that bank deposits within them do not erode and expose them to bankruptcy. Because digital currencies can be saved in electronic wallets through websites on the Internet away from banks.
How will the digital euro work?
Earlier, the European Central Bank made it clear that the digital euro is an electronic version of euro banknotes and coins, and will complement paper currencies..
It will also be an official currency guaranteed by the European Central Bank, and will enter the digital currency speculation market such as Bitcoin, and its value will be determined in dollars..
In this context, the amounts of the digital euro will be issued or transferred, as happens with the Bitcoin currency, and the records of accounts known as the Blockchain, and the block chain, will be used in the transfer and issuance..
Regarding payment and deposit operations, individuals will be allowed for the first time to deposit directly with the European Bank, and individuals and companies will be allowed to make daily payment operations in a fast, easy and secure way..
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