Association of German Banks demands a digital Euro

The Association of German Banks has published its position on digital currency, saying a ‘crypto-based digital Euro’ should be launched.

The group includes banks such as Commerzbank, Deutsche Bank, FinLeap, and UniCredit Bank among its 200+ members. The entity is considered the ‘voice’ of private banks in the country and rates programmable digital money as an innovation with great potential.

Moreover, the Association outlines how digital money is a requirement for automated internet of things (IoT) payments, customer convenience and cost, and to remain competitive. The banks believe that they, and other European entities, have the means to build and support the use of a digital Euro.

But they need institutional backing, such as lawmakers and regulators, first.

The entity has a detailed plan, with considerations of legal compliance, issuance, custody, and competition laws. It distinguishes ‘programmable’ money from cryptocurrencies, and account-based from (possibly, in the case of Libra) blockchain-based currency. Referring to Libra, monetary authorities will ban Facebook’s cryptocurrency project in Germany if it goes ahead. But that does not mean the nation, or its private banks are non-supporters of blockchain.

The Association of German Banks is far from the first to ask for what is essentially a central bank digital currency (CBDC). China has rolled out a currency project; furthermore the Bank of Canada was looking at a public CBDC to replace cash, and the Swiss National Bank and Monetary Authority of Singapore are also working on digital versions of fiat money.