Association of over 200 german private banks calls for digital euro

Feeling competitive pressure from Libra and China, the Association of German Banks, a trade group including Deutsche Bank, Credit Suisse, and Commerzbank, has called for a digital euro, touting the advantages of digital money over conventional payments with a particular appreciation for smart contracts. In a position paper released Wednesday, the Association posits that the monetary system must lie in the hands of sovereign national states and that any privately issued currency must therefore fit into the state-determined system. Furthermore, it demands that digital money fit within a uniform supervisory and regulatory framework.

Why it matters:

• Since the announcement of Libra, we’ve seen an influx of interest in cryptocurrencies from monetary incumbents. The CCP‘s recent entrance into the digital currency sphere further catapulted cryptocurrencies into the spotlight, and world leaders are beginning to take this technology more seriously.
• As many in the cryptosphere have suggested, the entrance of incumbent powers may not be uniformly positive for the industry and could represent a direct threat to the original values of the industry.