In a new position paper, the Central Association of the German Credit Industry clearly speaks out in favor of the E-Euro and at the same time emphasizes the disadvantages that a failure would bring with it.
The E-Euro cause is gaining momentum in Europe. After the European Central Bank (ECB) highlighted the negative consequences of not introducing digital money in an expert report at the beginning of June, the Deutsche Kreditwirtschaft (DK) is now following up. In one Position paper the five leading credit associations in Germany share the disadvantages that could result from a failure to introduce the e-euro and are constructing an ecosystem that goes beyond the normal scope of a CBDC.
Above all, this ecosystem must have three key features. On the one hand, as a “retail CBDC” in private use, it must fulfill a function similar to that of cash. The association also calls for an “offline function” to enable anonymous payments. This should be made possible via its own wallets.
On the other hand, however, the e-euro must also be applicable as a “wholesale CBDC” that can be used for the capital markets and internal banking transactions. According to the DK experts, the digitization process of central bank accounts should also be included in the ECB’s project. That leads to improvements for consumers, entrepreneurs and the banking industry.
DK calls for a smart contract function for the e-euro
The position paper lists the “deposit token” as the last point. The token issued by banks should support the two aforementioned types of e-euro. The focus here is primarily on corporate customers in the Industry 4.0 environment. A smart contract function is intended to automate contracts and make the industry more efficient.
The managing director of the German Savings Banks and Giro Association, Dr. Joachim Schmalzl, who is currently also the chairman of the German banking industry, in the press release available to BTC-ECHO:
With the increasing digitization and automation of processes, completely new opportunities are opening up for European companies. The banking industry is ready to offer its corporate customers new solutions with innovative forms of money. The ECB must set the framework for this in such a way that Europe’s banking industry and the real economy can make good use of the new opportunities.
Dr. Joachim Schmalzl in DK press release.
The German banking industry advocates an upper limit
In addition to the possible areas of application, the association also advocates an upper limit up to which EU citizens can use the e-euro. The DK agrees with the ECB on this point too, which had previously also spoken out in favor of a limit of 3,000 euros. However, the association does not give a fixed amount. They are convinced that the amount is of the greatest political, economic and communicative importance and is decisive for the success of a digital euro. Instead, they want to seek dialogue with the central banks of the EU member states.
Meanwhile, the E-Euro case seems to be developing a new dynamic. According to the DK press release, the ECB will launch the first pilot projects in the middle of this month.