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Eurochain the challenge of the European Central Bank in Libra

The ECB wants to launch a project very similar to that of Pound, to counter the Facebook project, this takes the name of Eurochain. 

Now it's just a search for various solutions based on DLT which can be applied in the area of ​​payment infrastructure, and which could be supported by existing services already present in some central banks.

Eurochain actually starts in April 2018, when a group of researchers start to evaluate and study the use of DLT and the various payment prototypes. The goal as stated by the European Central Bank is to achieve a centralized and simple payment system for all digital currencies of the various central banks.

With this system it would be possible first of all, safeguard privacy of the various users and subsequently would also ensure i checks on crimes such as money laundering, especially in the case of suspicious and large money transfers.

In a nutshell the Eurochain would be able to offer all security and compliance with the rules that Facebook's Libra at the moment, especially in the field of privacy, could not offer.

And the issue of privacy is very important, especially if you consider the Cambridge Analytica scandal and the data leaked by Facebook.

Furthermore, Eurochain would provide for a controlled currency by central banks, and it would overcome one of Libra's other problems, namely being controlled entirely by a private individual.

At the moment however, the press release issued by the European Central Bank states that: the initiatives undertaken by the ECB should neither discourage nor crowd initiatives by individuals for the creation of systems for fast and efficient payment in the euro area.

In short, this project presents itself as ambiguous towards the various private initiatives, of which, however, it would be a direct competitor. 

The new Eurochain is defined by the ECB with certain characteristics such as: the same value and characteristics of the single currency, operation through intermediaries connected to the ECB, collateralisation with the reserves held by the ECB, full assignment to the Central Bank in the event of entry and removal on the market, activation of an anti-money laundering authority.

Therefore, the currency would be completely centralized, as is planned for Facebook's Libra. The plans therefore seem to have a lot analogies such as the exploitation of a blockchain

In any case, at the moment there is still a substantial difference, namely that the European Central Bank would operate as a completely public manager, while Libra has and will always have a private operator, which even if subject to specific regulation will try in every way to pursue objectives related to the business and not to the common interest. 

for European Central Bank, however, the establishment of Eurochain it seems a mandatory way, as there are different entities at the state level, such as the China, who are about to launch their digital currency, which is already being tested. So it cannot be left behind, and it must obligatorily put on a par with the other world economic powers. 

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Silvia Faenza

Graduated in Political Science and International Relations at the University of Salento, in the 2014. From 2015 he is in charge of content management for online companies and publishing agencies, mainly as a ghostwriter, copywriter and web editor.

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