The association of German Banks (Bankenverband) that represents more than 200 private commercial banks and eleven member associations released a paper recently, stating that the “economy needs a programmable digital euro.”
“Monetary Policy is state’s responsibility”
The paper states that, it is undisputed that the responsibility of the monetary system lies with the sovereign states and the money offered by the banks or private companies must fit in with the state’s order. “Anything else will lead in chaos and instability.”
The Paper puts out some pertinent points.
“The user of a digital euro – whether man or machine – must be clearly identifiable. This requires a European or, better still, a global identity standard. With every form of digital money, customers should be identified using a standard that is just as strict as that which banks and other obligated entities are required to apply under current legal framework pursuing the combat against money laundering and terrorist financing.”
Making a case for cryptography-based digital euro while stating that, it should be created on the condition that a common, pan-European payments platform is also established.
According to the Bankenverband, a different yet competitive payment system should only be based on a common standard and a common currency. It stated, “In order to maintain Europe’s competitiveness, satisfy customers’ needs and reduce transaction costs, the introduction of euro-based, programmable digital money should be considered.”
In spite of being convinced that in such digitized economy, digital money is and will gain importance rapidly, the banks also point out that because of the positioning of crypto-based digital money the existing monetary system must not be endangered.
Facebok’s Libra, a private global digital currency, competing with the official currencies of the world economy might lead to economic and political conflicts in the coming future, the paper adds.
The banks do rely on national and international policymakers to act accordingly and ensure that competition with private currencies is not allowed.