With Smart Contract Capabilities
The Bankenverband, or Association of Banks, has expressed its desires through the publication of research paperin which it says that a cryptocurrency based digital Euro with smart contract capabilities is the need of the hour. The association, a collection of 11 different financial institutions and over 200 banks, points out that in the modern world, cryptocurrencies have had made a significant impact and a digital Euro would help the European Union stay relevant.
The paper comes in the heels of development and hype of Facebook’s Libra. The controversial currency by the social media giant has made a lot of bankers, central banks and governments nervous. The U.S. government has also grilled the founder and CEO, Mark Zuckerberg, and his team over the creation of Libra. EU governments such as France and Germany have out rightly spoken against it. This paper could be the result of the direct threat Libra poses.
Unlike Libra though, the digital Euro proposed by the Association comes with regulatory standards that it will comply with,
To create public trust in programmable digital money, compliance with the highest regulatory standards is essential. To ensure legal certainty, a legal classification of programmable digital money is necessary as well. All innovators must respect a uniform supervisory and regulatory framework. The issuance and custody of programmable digital money should also be possible under existing full banking license rules.
Apart from the Libra threat, the Far East is also in a position to change how the future rolls out for the Euro. The Vice Chairman of China Center for International Economic Exchange (CCIEE) has said that the Asian nation will be the first to launch a Centrally Backed Digital Currency(CBDC) and with its inherent properties, it will eventually become the global standard, even replacing SWIFT and CHIPS, the two largest inter bank networking systems.
From banning ICOs to declaring Bitcoin a movable asset to its new regulatory act, China is starting to open up to the fact that cryptocurrencies are here to stay (in one form or another) and the best option will be to start regulating and adopt the market and technology.
With the German banks crying for a Digital Euro, United States also thinking on the same lines, the next few years will be quite a spectacle, different cryptocurrencies vying for dominance.