On Wednesday, October 30, 2019, the Association of German Banks (i.e. Bankenverband) released a paper making several arguments as to why a digital euro is necessary, reports Coin Telegraph. The paper, in the closest translation possible, dubbed, “Beyond Libra: Why Business Needs a Digital Euro,” gives up to 10 reasons why the idea might come across as appealing to readers.
One of the main arguments made thus far is that any currency issued outside of the sovereign nation-states could lead to corruption. That is, any currency established by banks or private companies should belong to a state-determined system, otherwise, it could “lead to chaos and instability.”
The end solution? A digitalized Euro that is “clearly identifiable.”
Furthermore, the paper argued,
“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 currently legal framework.”
Just like any country would fear and want to overcome, the Association of German Banks also noted that it is essential that such a system be in place in order to rid money laundering and terrorist financing.
Another obvious point made in urging for a digital euro simply rests in ensuring that Europe is up-to-date and running amidst other competing countries within this area. To be more specific, they want to ensure that customers’ needs are satisfied while boosting Europe’s competitive nature – all of which can be done by introducing the digital asset.
Given Europe’s faith for what’s to come for digital assets, they shared that they will still do what it takes to preserve their existing monetary system, that way it is not at risk.
Pro-Digital Euro, Iffy on Crypto and Stablecoins?
It seems like Bankenverband is not in favor of private coins like Libra, as they’ve since requested international policymakers to take on their roles in ridding competition from private currencies altogether.
The entirety of this paper seems to align with German Finance Minister, Olaf Scholz, reports the news outlet, who has previously voiced that countries such as China, Russia and U.S. shouldn’t be the only ones competing.
However, the President of the European Central Bank, Mario Draghi previously shared that,
“stablecoins and crypto-assets have had limited implications in these areas and are not designed in ways that make them suitable substitutes for money.”