Although earlier reports suggest that China is at the forefront in the race for the world’s first sovereign digital currency, it does not appear that other parties would be left behind for too long.
The Association of German Banks (Bankenverband), an organization consisting of 11 member associations and over 200 commercial banks, has said in a new research paper that the Eurozone economy will significantly benefit from a ‘programmable digital euro.’
The new paper notably sought to provide insights regarding the growing trend for digital currencies whose existence initially does not form a part of the state-determined monetary policy. The proposal is for authorities to create a policy framework that would define which entities (private or government) should be responsible for controlling these useful new-age payments tools.
After rooting for governments to be in control of the issuance of such digital currencies, and noting how the Libra project by Facebook has brought the topic to the limelight, the member banks recommended the creation of a “crypto-based digital euro.”
A section of the paper which is highlighted as the opinion of member banks on the issue of digital currencies reads:
“A programmable account and crypto-based digital euro should be created, and its interoperability with book money ensured.”
The Association pledged to play its part in the establishment of a sustainable and innovative monetary system, which includes the proposed digital euro that would run on a common pan-European payments platform.
Meanwhile, another section of the paper advised German regulators to clarify for income tax purposes whether digital money should exist as a currency or an economic good, a long-standing issue in most jurisdictions.