Virtual currencies are multiplying in the Western world. Central banks don't want to lose control of the private sector

In Washington, Frankfurt and on the side of Silicon Valley, in the hushed corridors of central banks as in the offices of digital giants, we look at the Chinese experiment around the digital yuan with a mixture of curiosity and concern. Curiosity, because this full-scale test offers a glimpse of the possibilities opened up by "central bank digital currencies" (MDBC), as experts call them. Concern, "because getting ahead of this technology could allow China to dictate future developments in global payment infrastructure, those facilitating cross-border trade and remittances," said Aditi Kumar, a specialist on the subject at Harvard University.

Today, nearly 80% of the world's central banks are studying the possibility of creating their own digital currency, based in particular on blockchain (a technology for storing and transmitting information), according to the Bank for International Settlements. A handful of them have already begun experiments. "There are two types of MDBC, very different," says Patrick Artus, Chief Economist at Natixis. The first is reserved only for payments between banks, while the second is intended for individuals – this is, then, the digital equivalent of banknotes issued directly by the central bank. This second form of money would not go through bank deposits, like euros or dollars today used for payments by credit card or transfers.

In recent months, the Bank of France has been experimenting with the first type of MDBC. In October 2020, the European Central Bank (ECB) launched a public consultation on whether to create a digital version of the single currency for citizens, in addition to cash. "We will have a digital euro," predicted its president, Christine Lagarde, Wednesday, January 13, adding that it would nevertheless take time. The Bank of Sweden has been working on an "e-krona" since 2016. Tested for a year, it could complement traditional crowns and be used for payments by a mobile application. For its part, the Federal Reserve (Fed, US central bank) conducts research with the Massachusetts Institute of Technology.

A double challenge

In any case, the challenge is twofold: to use these new technologies to improve the security and efficiency of means of payment and, above all, not to be overtaken by innovations emanating from China or the private sector. Like bitcoin, created in 2008, whose price continues to soar. And especially Libra , Facebook : its announcement, in June 2019, first made central bankers pale with anguish.

At the time, Mark Zuckerberg's group presented the Libra project as an ambitious digital currency co-founded with 28 partners, including Uber, Mastercard or Free (whose founder, Xavier Niel, is an individual shareholder of Le Monde). Its objective: to shake up the banking system by offering "faster, simpler and cheaper" means of payment, especially for the 1.7 billion people without a bank account. The cryptocurrency had to rely on a basket of currencies, including the euro and the dollar. The founding companies could create electronic wallets integrated into their services, such as Facebook and its subsidiaries WhatsApp, Instagram and Messenger, bringing together billions of users around the world.

The cocktail quickly seemed too explosive to financial regulators, who organized a barrage against the project, in the name of state sovereignty, transaction security and the fight against money laundering. After resisting for several months, Libra suffered the defection of many major partners, including the payment system PayPal which has since announced that it would accept transactions in bitcoins. In April 2020, the project launched by Facebook reduced its ambitions: it is now a question of focusing on simple electronic versions of national currencies, starting with the dollar.

Delayed several times, the launch of the first currency of the association, renamed in passing "diem", could take place as soon as the Swiss authority Finma has given its approval. Or possibly early 2021, wrote the Financial Times,

in December 2020.

For its part, Facebook is ready to launch its electronic wallet, also renamed: "novi". The application would be "in the process of obtaining authorization"

in several countries and regions. E-money and online payment are still a central pillar of Mark Zuckerberg's strategy, which wants to add an "e-commerce" layer to its application ecosystem. The group has also fought for many months to obtain permission to generalize its electronic payment test in WhatsApp to all of India, and is trying to do the same in Brazil. Faced with authorities skeptical or worried about his plans for a private digital currency, Mark Zuckerberg has repeatedly presented them as an extension of American and Western financial "leadership". To block them, he argued, would be to expose oneself to the threat... of the Chinese.