German banks call for digital euro
A common digital currency can provide an effective response to the Facebook Libra project.
The Association of German Private Banks has presented a position paper advocating the establishment of a European digital currency and a common identity standard across the Eurozone – reported by Finextra.
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 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.