And now the digital Euro issued by the central banks
Facebook’s Libra helps the idea of a global cryptocurrency break through. This boosts the Bitcoin price, which breaks the $ 10,000 mark. Now the German CDU / CSU parliamentary group wants to make the Blockchain the key technology – not only for money.
New times require new concepts. Suddenly, there’s talk of crypto-tokens, distributed ledgers, smart contracts, and blockchains everywhere, terms of the virtual money world. With its idea of a global cryptocurrency named Libra, the US platform company Facebook has set politics and regulators worldwide in a state of excitement. Suddenly, many decision makers are aware of how much governments lag behind the technical possibilities.
In Germany, the Bundestag faction of CDU / CSU now wants to give a political response to the digital revolution in the money sphere: the MEPs adopted on Tuesday a key issues paper that contains ambitious concepts.
Should the demands become government policy, this could catapult the Federal Republic from a place somewhere in midfield to the head of the Blockchain movement. The document entitled “Future Technology Blockchain – Using Opportunities for Germany” outlines the possibility of a new digital economy.
Among other things, the Christian Democrats are calling on the Bundesbank to create a “digital euro”: “Central banks should issue crypto-tokens through commercial banks, which handle them like sight deposits.
A crypto-token is like digital cash, the term stable coin indicates that a digital euro always has the same value as a euro in the account or a euro coin in circulation. The call can be understood as a defense against Facebook’s digital money, which should be introduced in early 2020 and should also be stable in value.
Bundesbank President Jens Weidmann had already rejected such considerations at the end of May: “The introduction of digital central bank money should definitely be well-considered,” Weidmann said in a speech in Frankfurt.
Digital central bank money can not only call into question business models of banks, but in a crisis, it may itself become a risk to financial stability, “as with digital central bank money an additional, very liquid and secure investment alternative would exist”.
The people’s representatives, however, fear that if the private currency Libra is a success, central banks could eventually lose control of the financial system. This is even more so, as the Facebook money does not dampen interest in Bitcoin and other older crypto coins, but even fueled, as the price explosion of recent days shows.
Bitcoin, the first currency based on blockchain encryption, has been around for ten years. Since then, hundreds of cryptocurrencies have been added that largely elude state control. The CDU / CSU initiative aims to provide consumers with a regulated and stable alternative to these coins, which are usually organized on a decentralized basis.
“We want to transform the benefits of blockchain technology from the shadow economy into legal and legitimate business models,” reads the Group’s key issues paper. However, the policy has a significant gap to catch up. A national blockchain strategy was announced in 2017 in the black-red coalition agreement.
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