Digital Euro Association Blog

CBDC: Considerations for the Digital Euro

Dec 8, 2020 4:15:18 PM / by dGen posted in Programmable euro

0 Comments

In this report the DEA Partner dGen examines a potential next step for one pillar of the economy - money itself. Central Bank Digital Currencies (CBDCs) represent a means of bringing money into a digital future, and are a point of interest for reserve banks around the world. A CBDC could be the next innovation in money - a boat no country wants to miss.

Read More

The Path to a Digital Euro - Interview with dGen and Jonas Gross

Oct 20, 2020 12:24:38 PM / by dGen, Jonas Gross posted in Programmable euro

1 Comment

Changes to payments have been brewing for a while now. But, while the impact of a major digital currency, like the planned digital Yuan, is expected to be substantial, no one is quite sure exactly how this will impact global economics.

Increasingly, there are calls from other major economies to keep pace with both other countries, of which China appears to be at the forefront, and private stablecoins - or risk being pushed out of prominence. The Digital Euro Association (DEA) is a group that was started to drive innovation, collaboration, and education around the development of a digital payment system for the Euro Area. We spoke with Jonas Gross, a leader in Central Bank Digital Currencies, stablecoins, and cryptocurrencies research and Co-Founder of the DEA, about why it's so important for the ECB to release a programmable digital currency and how this could look.

Read more. 

Read More

Programmable Money and Programmable Payments

Sep 29, 2020 12:09:54 PM / by Victor von Wachter, Jonas Gross, Alexander Bechtel, Philipp Sandner posted in Digital Money, Programmable euro

0 Comments

Medium

“Programmable money” is, without doubt, one of the major buzzwords in the blockchain space in 2020. Even though everyone seems to talk about it, we still lack a clear definition and hence common understanding of this term. In this article, we present a taxonomy of programmable money. In particular, we argue that “programmable money” has to be differentiated from “programmable payments”. To make this distinction as clear as possible, we develop a framework in which we decompose the payments value chain into three pillars: the contract execution system, the digital payment infrastructure, and the monetary unit. 

Read More

Open Letter: Roadmap Towards a Digital Programmable Euro

Jul 31, 2020 12:11:26 PM / by Philipp Sandner posted in Programmable euro

0 Comments

Medium

With this letter published on June 15, 2020, we would like to propose a long overdue, high-level roadmap concerning the digital programmable Euro. This initiative is supported by a large and diverse group of experts from across Europe and other countries.

Read More

The Digital Programmable Euro, Libra and CBDC: Implications for European Banks

Jul 31, 2020 11:57:40 AM / by Philipp Sandner, Jonas Gross, Philipp Schulden, Lena Grale posted in Programmable euro

0 Comments

Working Paper

Existing payment systems get more and more disrupted. As a consequence of the global trend of digitizing payments and generating new business models from the use of blockchain-based digital programmable money, several new payment initiatives have been announced recently. Besides “classical” crypto assets, also stablecoins become increasingly important. The announcement of the Facebook-initiated Libra stablecoin is mainly perceived as a game-changer for the financial sector. Today, also central banks discuss the introduction of their own digital currencies, so-called CBDCs. To date, these payment innovations are not sufficiently discussed and analyzed from the perspective of different sectors and industries, as its implications remain unclear since most initiatives have not yet been introduced. At this point, the literature does not sufficiently discuss the implications of these innovations on the financial sector. This paper sheds light on the perception of these payment initiatives by interviewing more than 50 senior experts. In this study, we analyze the impact of digital programmable Euro initiatives, such as the Libra stablecoin, and CBDCs, on banks. We find that both Libra and a Euro CBDC might heavily affect European banks. Experts fear that large-scale financial disintermediation of the financial sector could take place, and digital bank runs could be triggered. Besides these risks, our findings suggest that banks also have the opportunity to develop new business models stemming from these initiatives. Therefore, Libra and a CBDC Euro should not only be seen as threats but also as opportunities.

Read More

The Digital, Programmable Euro: Statement by the FinTech Council of the German Federal Ministry of Finance

Jul 31, 2020 11:40:01 AM / by Philipp Sandner posted in Programmable euro

0 Comments

Medium

On July 23, 2020, the FinTech Council of the German Federal Ministry of Finance (German: FinTechRat des Bundesministerium der Finanzen) published a statement about the digital, programmable Euro. With this article, we provide an unofficial translation of the German version of the paper with the goal to make the content also available to non-German speaking readers. More information can be found on the website of the German Federal Ministry of Finance.

Read More

How Will Blockchain Technology Transform the Current Monetary System?

Jul 2, 2020 11:41:28 AM / by Manuel Klein, Jonas Groß, Philipp Sandner posted in CBDC, Programmable euro

0 Comments

Medium

Why should the payment systems we use and the money that is transferred via these systems itself make use of distributed ledger technology (DLT), namely Blockchain technology, the underlying technology of cryptocurrencies such as Bitcoin? This article gives a brief explanation of the structure of the current money and payment system and the functioning of blockchain technology with Bitcoin as an example. It further elaborates the advantages of DLT and its difference to the current design of the monetary system. The last chapter summarizes the different ways of how DLT can be used in our current money and payment system.

Read More

The Digital Euro and the Role of DLT for Central Bank Digital Currencies

Jul 2, 2020 11:28:02 AM / by Manuel Klein, Jonas Groß, Philipp Sandner posted in CBDC, Programmable euro

0 Comments

Medium

Digitization has reached the monetary system. The advent of crypto assets, such as Bitcoin and Ether, revealed numerous advantages these digital assets based on distributed ledger technologies (DLTs) can bring: Using DLT can enhance the security of sensitive financial transaction data, increase
transaction speed through faster processing and settlement and automate numerous business processes through smart contracts. These advantages ought to be realized in the conventional monetary system as well — not only in the “crypto industry”. DLT can be used both to digitally represent bank deposits and to tokenize central bank money via central bank digital currencies (CBDCs). Current DLT-based CBDC projects and prototypes among others by the Chinese and Swedish central banks, but also initiatives by the European Central Bank (ECB), show that DLT will be an essential pillar ofthe digitization of the monetary system in particular and the financial system in general in the future.

Read More