How ECB's Digital Euro Plans Supported BTC Rate

The cryptocurrency market keeps demonstrating a solid recovery. Over the past week, Bitcoin has risen 7%, surging to $11,500, which highly encouraged crypto traders who had been waiting for a full-fledged bullish rally for almost a year.

It’s worth noting that the current rise in the BTC rate coincided with the softening of the world's central banks’ rhetoric regarding digital currencies, which are now accepting the possibility of their practical application in the modern financial system. The most advanced regulator in this matter is the European Central Bank, which is seriously considering launching the official European digital currency, a digital euro. Speaking at a virtual press conference hosted by the International Monetary Fund (IMF), the European Central Bank president Christine Lagarde said that the ECB was "very seriously" looking at the creation of a digital euro.

Lagarde noted that a digital euro is not meant to replace a regular euro, but rather to complement it. According to her, the possible introduction of the EU digital currency is primarily aimed at giving people “more choices”. The ECB also acknowledged that in the context of the coronavirus pandemic, as well as softer monetary policies, global regulators were forced to resort to, confidence in digital payments has significantly increased. Based on this, the digital euro is conceived as an alternative to private digital currencies.

Market participants were very enthusiastic about the ECB's being more open-minded regarding the digital currency industry. Let’s recall, that exactly a year ago, the European Commission refused to support Facebook (NASDAQ:FB) and its Libra cryptocurrency. One of the main arguments of Brussels officials was fears that the project could undermine the EU's monetary stability.

It is worth noting that other central banks may also decide to take the path towards legalizing digital currencies. Whatever they opt for, Bitcoin will still have a very good chance of remaining the best alternative to any newly created representative of the digital industry. At least, it is the free and easy conversion of Bitcoin into the same digital euro that will be the only way to ensure the smooth movement of capital from one asset to another during the first stage.

The expectations of new stimulus measures from the US Congress provide additional support for BTC/USD. Since we’re talking about a potential multi-trillion dollar bailout fund, the threat of impending inflation could make traders consider keeping their capital in traditional currencies, which will definitely become cheaper in the near future. With that said, the BTC / USD rally may well continue with a target above $ 12,500.