The Socialist Party (PSOE) prepares the creation of a public cryptocurrency. The Socialist Parliamentary Group has presented in Congress a Non-Legal Proposal (PNL) to promote the creation of a public currency in the face of “the gradual disappearance of cash.” Socialists argue that new payment trends lead to “a purely private and more insecure money.” The parliamentarians are committed to “the recovery of money as a public good, more stable and under democratic control”, as stated in the text of the proposal.
The PSOE promotes this measure after the European Central Bank (ECB) announced its intentions to create a digital Euro. The deputy general director of Financial Innovation and Market Infrastructures of the Bank of Spain (BdE), Carlos Conesa, assured this month that “the decision to launch a project on the digital Euro is very close.” A large part of the central banks plan to test these digital currencies (CBDC) or are already doing so.
However, the PSOE’s plan is to create the Spanish version of these digital currencies. Specialists warn of the hidden terms and objectives in the PSOE digital currency proposal. If this proposal prospers in the terms proposed by the Socialists, the Spanish cryptocurrency would serve the Government to eliminate the brake mechanism that limits inflation -the demand for credit-, eliminate control over the money supply and establish political control of everything. the money.
“It would be submitted, as at present, in the last instance to the control by the representatives of the citizenry, who set their monetary policy objectives,” says the PNL presented in Congress. And, furthermore, the PSOE insists that this would be achieved “without the nationalization of the banking system or the nationalization of credit.”
The Socialists’ proposal criticizes “the privilege” of banks over money
The socialists stress that this digital currency would end the “privilege” of banks over money. Specifically, the text defines this cryptocurrency as “digital public money, intangible and perfectly usable to make electronic payments, but in this case backed by the State, making it safe money.” In the opinion of the socialists, “at present, it is perfectly feasible for each individual to have their own account with their digital money directly at the central bank. A privilege, for the moment, restricted to banks.”
In this way, the PSOE explains that the fact that individuals could have open accounts directly with the central bank raises the possibility of direct control of the amount of money, public digital money, secure as it is backed by the State and anonymous. , to the extent that the data on transactions would be legally protected, as is the case with tax or Social Security data”. In his opinion, the transactions would be “unrelated to commercial exploitation, as can happen with other private payment systems”. .
In addition, the Socialist Group in Congress considers that the measure will allow more liquidity in the system. “In the event that a monetary expansion is necessary, it allows a more direct mechanism, by injecting liquidity directly into current accounts and moving with it immediately and without intermediaries to economic activity,” says the PNL.
The Socialists acknowledge that “in any case, digital public money is a reality still in the making that needs to be carefully investigated and evaluated, studying the pros and cons of the different modalities that are being proposed.” However, they ask to study the matter because, in their opinion, “our country has remarkable elements, such as digital infrastructures, which will improve if possible in the coming years.”
The ECB is still studying it
The deputy general director of Financial Innovation and Market Infrastructures of the Bank of Spain, Carlos Conesa, points out that the decision to issue a digital euro “has not yet been taken”, although he has indicated that “it is foreseeable” that the Governing Council of the European Central Bank (ECB) will meet soon to decide on the launch of a research project that would make it possible to increase the degree of preparation and knowledge of the Eurosystem in this area.
During his speech at the round table, Towards a digital euro?, organized by the Madrid College of Economists, the Ecofin Forum and MAD FinTech, Conesa argued that the launch of the community currency in a digital version “does not seek to end money in cash” and that “the Eurosystem’s emphasis so far is that the digital euro complements the means of payment currently available”.
In addition, he has reviewed the concept of CBDC, and the report Report on a digital euro, published by the ECB in October 2020 and in which he summarizes the vision of a community digital currency, which would be a liability of the central bank, in format digital, as a supplement to current cash and deposits and for use in retail payments.
“The ECB plan is not an answer to cryptocurrencies”
Carlos Conesa, Deputy General Director of Financial Innovation and Market Infrastructures of the Bank of Spain, has stated that the issuance of a digital community currency “is not a response to a specific threat” or to the development of cryptocurrencies, on which the CNMV and the Bank of Spain have already launched alerts as an investment tool. Likewise, he has denied that there is a race between central banks to launch their own digital currency. Right now, “80% of central banks are working on CBDC” as a response to various problems. In this way, he has presented the case of some emerging countries, where the cost of distributing cash may be very high, or where there may be financial inclusion problems. Regarding the plans and measures of the European Union, he has rejected that it is lagging behind in this area, since “in many other jurisdictions they have not reached the sophistication of the debate that we already have now” in the Eurosystem.
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