German banks have presented a position paper in which they make several arguments for the digital euro.
The Association, which represents more than 200 private commercial banks and eleven member associations, says the arrival of Facebook’s private cryptocurrency Libra raises serious questions about what the global monetary system will look like in the digital age and who will shape it in the future.
“There can be no question that responsibility for the monetary system lies, and will continue to lie, with sovereign national states,” the paper posits. “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.”
To this end, the Association of German banks is calling for the creation of a crypto-based digital euro operating across a common pan-European payments platform.
For this to be achieved lawmakers and financial regulators must first lay the foundations for a level competitive playing field between sovereign entities, banks and private interests.
“The user of a digital euro – whether man or machine – must be clearly identifiable,” the paper concludes. “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.”