The Association of German Banks, a body which represents over 200 private banks in the country, has called for a digital Euro, taking advantage of what it calls the “Fourth Industrial Revolution”. The group, which includes giants such as Deutsche Bank and Credit Suisse, references Facebook’s attempts to get their Libra token past regulators, saying that the time is right for such developments but that they cannot be left in the hands of private companies.
Crypto Can “Uncouple” Money from the Existing Banking System
In a statement posted last week, the group states their position across eleven points, writing that they “rate programmable digital money as an innovation with great potential”, although it must be created and operated by a sovereign entity. Any such tokens must be in “compliance with the highest regulatory standards”, which is the exact issue Facebook is facing, while they also call for a “global identity standard” to ensure that anonymity does not exist on the system. The group pulls no punches when describing the potential disruption that digital currencies could cause to the traditional banking system, stating that “Crypto-based digital money features innovation that has far-reaching implications and the potential to uncouple the money in circulation from the existing banking system.”
Eurozone Risks Falling Behind
The lengthy post, which goes into detail about the technical aspects of blockchain and smart contracts, also explains the risks posed by Libra, echoing the sentiments of German politicians Olaf Scholtz and Thomas Heilmann who have both raised doubts about the efficacy and viability of the Libra token. Germany passed its Blockchain Strategy into law in September, a strategy that all but ensured that a private token such as Libra would never be adopted but opened the door for the kind of sovereign currency-based token that the association discusses. The post acts as a kind of call to arms for policymakers to get their act together and start working out how to make the most of the shift to digital assets before they are left behind, something that Binance CEO Changpeng Zhao warned would happen in the wake of China’s recent endorsement of blockchain technology.