The Association of German Banks, a lobby group of more than 200 private commercial banks, has called for a “programmable” digital euro and a common pan-European payments platform.
In a position paper published Wednesday, the association, which counts Deutsche Bank, Credit Suisse and Commerzbank as its members, said that programmable digital money has advantages over conventional payments, including faster transactions. While the Single Euro Payments Area (SEPA), an instant payments scheme is already there, it is “not yet possible to integrate it into digital processes and smart contacts,” said the association.
It added that the banking industry should work together with the central banks at the European level to create a payments system that addresses existing issues, as well as retains the benefits of established payment infrastructures.
“This is the only way to withstand the competitive pressure from the U.S., and soon probably also Chinese, technology companies,” said the association, hinting at Facebook-led planned stablecoin, Libra.
The user of a digital euro, whether man or machine, must be clearly identifiable to combat money laundering and terrorist financing, per the association, which was founded in 1951.
“Europe must keep up with this competition so that the global financial architecture does not lead to a polarisation between American or Chinese solutions,” the group concluded.
Earlier this month, Germany’s finance minister Olaf Scholz also said that he is in favor of national digital euro, commenting: “We should not leave the field to China, Russia, the US or any private providers.” While in the U.S., some lawmakers have advocated the development of a digital dollar.