Association Of German Private Banks Propose Digital Euro
In an interesting turn of events, over 200 German Banks have proposed establishment of a digital euro with smart contract compatibility. In the written proposition, presented by the association, it was also mentioned that the digital currency will have a common identity across Eurozone.
The Association of German Private Banks is an eleven-member consortium that acts representative to more than two hundred private commercial banks. After Facebook’s declaration of launching Libra as their private cryptocurrency, the association has raised concerns over the future of the global monetary system in this digital era and the way it will be impacted by the ongoing crypto invasion.
The petition mentioned,
“There can be no question that responsibility for the monetary system lies, and will continue to lie, with sovereign national states. Any currency provided either by banks or by other private companies must, therefore, fit into the state determined system. Anything else would ultimately lead to chaos and instability.”
As a solution, the Association is backing for a crypto-based digital euro that will operate across all European payment platforms. To that end, the first thing that needs to be done is for the financial regulators and lawmakers to start groundwork on establishing a competitive playing field between banks, sovereign bodies, and private entities.
In the concluding lines, it was added in the proposition,
” The user of the digital euro – whether man or machine – must be identifiable. This requires a European or, better still, a global identity standard. With every form of 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.”
The World’s Reaction:
How the rest of the European counterparts react to the German proposition is yet to be seen. However, with the rise in crypto popularity, the demand for individual digital currencies across geographies is gradually gaining momentum.
There has been growing chatter regarding the USA considering to shift their domestic currency on Blockchain. Called the neutral banking hub of Europe, Switzerland is also considering the digitization of the Swiss franc.
Taking the opposite stance, South Korea’s central bank has clearly expressed its disinterest in establishing a state-backed digital currency. Amidst mixed reactions across the world how and whether this new digital euro proposition reaches the stage of implementation is a question that only time will answer.