German banks are calling for the creation of a European digital currency.
The official request comes from the Association of German Private Banks, which has published on its website a long article explaining the thought process starting from Libra and ending with the digital euro.
According to the association, Facebook’s stablecoin initiative raises the question of who will shape the global monetary system in the digital age and how it will look in the future.
On this point, they affirm that the responsibility for the monetary system must continue to remain in the hands of the nation-states and that any other currency issued by banks or private companies must fall within the system determined by the states.
New technologies in this area would be a real challenge for the banks since innovation and digital change will permanently transform their sector.
The association argues that a stable currency is the basis for any economic system and that this stability should not be jeopardised by digital coins and cryptocurrencies.
In this light, recognising that programmable digital money is an innovation with great potential, they call for the realisation of a digital euro based on the technology underlying cryptocurrencies and a common pan-European payment platform for the use of this programmable digital euro.
In addition, they also consider it necessary to have a legal classification of the programmable digital currency, so that everyone respects a uniform regulatory and supervisory framework.
In this respect, they also demand that legislators and regulators lay the necessary foundations for this digital innovation, and establish a basic right which, among other things, ensures competition.
With regard to the digital euro, in particular, they want each of its users to be clearly identified, using a standard as strict as that currently used by the traditional banks themselves, in order to prevent money laundering and the financing of terrorism.
The proposed framework is complex, and very closely follows the current framework for fiat currencies. By contrast, it is a long way from the typical decentralised cryptocurrency framework, effectively drawing a real divide between the two worlds.
In fact, if this proposal were accepted, the result would be a long way from what decentralised cryptocurrencies are helping to build, highlighting a sort of impermeability between the two worlds, one strictly controlled and the other completely free.
Despite what the Association of Private Banks in Germany has said, it is not guaranteed that it will be their world that will prevail.