Digital Euro Association Blog

Public Hearing on the Digital Euro in the Finance Committee of the German Parliament: A Summary

On Monday, February 19, the Finance Committee of the German Bundestag (Federal Parliament) hosted a Public Hearing on the Digital Euro. Various external experts were present for the public hearing, sharing their views on the digital euro. These experts were previously appointed by different fractions of political parties such as the SPD, CDU/CSU, FDP, Bündnis 90/ die Grünen and AfD. The panel of experts included representatives from Bundesbank, the German banking sector, academia, think tanks, and technology. It was an honour for the Digital Euro Association (DEA) to be invited as an expert to this hearing.

The public hearing evolved around the following topics:

  • The subject of the "Digital Euro"
  • The motion by the CDU/CSU Parliamentary Group to "Make the vote on the digital euro binding in the Bundestag" (Drs. 20/9133)
  • The proposal by the AfD Parliamentary Group to "Preserve cash as the only legal tender and prevent surveillance of citizens through digital central bank money" (Drs. 20/9144)

Represented by Chairman Dr. Jonas Gross, the DEA took this opportunity to influence the trajectory of digital currency legislation and implementation in Germany, directly impacting the future of digital money. In the process, DEA lite and supporting members were granted the opportunity to contribute their expertise or opinions on these significant topics previous to the hearing.


Prior to the public hearing, the parties CDU/CSU and AfD both published a motion in regards to the introduction of a digital euro.

Motion of the CDU/CSU Fraction

The motion of the CDU/ CSU parliamentary group aims to address concerns about the lack of parliamentary involvement in the decision-making process. They call on the Federal Government to "commit itself, as part of a voluntary self-commitment, to only approve the introduction of a digital euro in the Council of the European Union if the German Bundestag has previously spoken out in favor of its introduction" (20/9133). The German government should also advocate to the European Commission, the European Parliament and the other EU member states that the national parliaments of the EU member states must give their approval. 

Highlighting the established legislative protocols governing Euro-related matters, the motion emphasizes the necessity for parliamentary engagement, drawing attention to the precedent requiring consensus between the Bundestag and the government before the introduction of the Euro in another EU member state.

The motion specifically addresses the European Commission's proposal for a legal framework governing the digital Euro and underscores the continued importance of preserving the role of physical cash amidst the evolving digital payment landscape. A critical aspect of the motion pertains to the disapproval of the European Commission's position, which excludes national parliaments from participating in the decision-making processes regarding the introduction and configuration of the digital Euro.

Beyond its monetary functions, the motion accentuates the Euro's broader significance as a symbol of European unity, emphasizing its role in facilitating travel, business, and enhancing the efficiency of the EU internal market.

Acknowledging the emotional connection people have with currency, especially cash, the motion stresses the importance of considering the societal impact of any alterations to the currency system. It expresses concern about the European Commission's proposal for the digital Euro, particularly its potential effects on both electronic and cash transactions, and advocates for a decisive role for national parliaments in Eurozone countries in the decision-making process. The Union rejects a weakening of cash. The Federal Government should "resolutely oppose any initiatives at EU level and in particular ensure that the status of cash as legal tender remains untouched".

Furthermore, the motion concludes with a series of recommendations directed at the German government. These include urging commitment to support the introduction of the digital Euro in the EU Council only if approved by the Bundestag, advocating for the participation of national parliaments in EU decision-making, opposing initiatives that may undermine the status of cash, and encouraging a comprehensive societal discourse on the digital Euro within Germany.

Motion of the AfD Fraction

In its motion (20/9144), the AfD parliamentary group outlines concern over the European Commission's proposal for the introduction of the digital Euro and emphasizes the importance of preserving physical cash as the sole unrestricted legal tender. It further highlights apprehensions regarding the potential surveillance of citizens through digital central bank currency and raises specific points against the proposed legislation. The pivotal role of physical cash in economic transactions, asserting its significance in daily life, economic activities, and as a crucial protector of privacy receives endorsement in this motion. Concerns are raised regarding the potential erosion of financial privacy in a society heavily reliant on digital transactions, cautioning against the emergence of a surveillance state facilitated by the implementation of a digital central bank currency.

Criticism is furthermore directed at the legislative practices of the European Commission, with a perceived contradiction highlighted between the proposed digital Euro as a supplement to cash and ongoing efforts at the EU level to restrict and control cash transactions. The motion underscores the importance of cash by emphasizing its anonymity and security features, crucial for consumer protection, independence from banks, and resilience against cyber threats.

Specific objections are raised against the European Commission's digital Euro proposal, citing potential infringements on individual rights, privacy concerns, and the perceived risk of the digital Euro monopolizing the payment landscape. AfD specifically demands that the German government should ensure "that the ECB and the national central banks (NCBs) of the Eurosystem are not allowed to issue digital central bank currencies" and that the government should oppose the introduction of a digital central bank currency at European level. 

The motion concludes by presenting a set of concrete recommendations to the German government, urging discontinuation of support for organizations advocating cash abolition, opposition to the issuance of digital currencies by the ECB and national central banks, resistance against the introduction of a digital central bank currency at the European level, and the introduction of legislation to safeguard the status of cash as the sole unlimited legal tender. It is also calling for the Basic Law to be extended to include a right "to the unrestricted use of cash". (bal/19.02.2024)

Voices of the Public Hearing

Prof. Dr. Volker Wieland, Professor of Monetary Economics at Goethe University Frankfurt and invited as an expert at the suggestion of the CDU/CSU parliamentary group, explained that there is ultimately already a digital euro, i.e. "a state-provided currency". In his written statement, he said: "However, this digital central bank money is only available to banks that have a corresponding account with the central bank. The population of the monetary union only has access to cash from the state. However, they have access to private digital money such as current account deposits at banks. This is referred to as book money." Moreover, he points out the revenue-increasing effect on government budgets. "The digital Euro would provide a means to somewhat safeguard government seigniorage revenues in this context".

Prof. Dr. Rainer Böhme, Professor of Data Security and Protection at the University of Innsbruck and invited at the suggestion of the Bündnis 90/Die Grünen parliamentary group, also addressed this aspect. He explained that cash was currently the only way for people to hold a direct claim against the central bank. "All other forms are promises from the private sector," explained the engineer. The digital euro would empower people, said Böhme. In this way, the approach differs from that in China, where the digital currency is designed as a surveillance instrument. "The digital euro differs from this in that it should have very ambitious data protection goals," said Böhme.

Bundesbank board member Burkhard Balz cited one advantage of the digital euro as being the possibility for the state to pay out money directly to citizens. Balz was invited as an expert outside of the parliamentary group contingents. He cited child benefit and other state benefits as examples of direct payments. “The specific use case [is] to send payments directly from government entities to individuals through the digital Euro wallet.". He refers to child benefit transfers, amongst others.

At the same time, Balz pointed out that there were no efforts to weaken cash. On the contrary, the third generation of euro notes is currently being prepared: "These are very extensive and complex procedures. You wouldn't do something like this if you didn't have confidence in cash." The Bundesbank will decide on a new cash strategy for Germany in the coming months. "This shows how much we stand by cash," said Balz.

Instead, federal policy should make use of the right of the national parliaments to give their opinion. The approval of the Bundestag in the area of EU law is only necessary if, for example, new member states are to be admitted to the Union or the European treaties are to be amended, said Hufeld, who was invited at the suggestion of the SPD parliamentary group.

The Digital Euro Association, represented by Dr. Jonas Gross, was invited at the suggestion of the FDP parliamentary group, and also commented on the topic of data protection. "Privacy is a major challenge. "From our perspective, privacy must be technically guaranteed, not just promised." The great thing is that there are some technologies that make this possible," Dr. Jonas Gross explained. A distinction should be made here between hardware and software solutions. With regard to software solutions, the association called for parts of the codes on which a digital euro is based to be disclosed.

Professor Dr. Ulrich Hufeld, an authority in Public Law and Tax Law at the Helmut Schmidt University of the Federal Armed Forces in Hamburg, voiced opposition to the Bundestag's inclination to reserve approval for the digital euro. He urged the CDU/CSU parliamentary group, stating, "Do not burden the ordinary legislative procedure in the European Union with a reservation of consent." Hufeld argued against making national parliamentary approval a prerequisite for EU-level competences, asserting that it is not in Germany's best interest.

The State of the Digital Euro in Public Debate

The recent public hearing on the digital euro revealed a nuanced landscape of opinions among political parties in Germany. While there is no overt enthusiasm, it became evident throughout the hearing that a more profound understanding, especially regarding technological aspects, is imperative for further informed evaluations.

The hearing witnessed a recurrent and legitimate inquiry into the benefits of a digital Euro for citizens as well as a strong focus on privacy. Within the discussion privacy was rightly emphasized as a cornerstone of a digital euro's value proposition, underscoring the need for not just “promised privacy” but “technically guaranteed privacy”. This discourse emphasizes the importance of robust privacy measures in ensuring public trust and acceptance.

Surprisingly, the topic of open-source principles surfaced in multiple inquiries, indicating a growing awareness of their significance. Questions were raised regarding the establishment of trust, a pivotal factor influencing adoption of a potential digital euro. In the discussion, the suggestion was made to make the code of the digital euro open-source. This novel approach, while relatively unfamiliar to central banks, holds potential for enhancing trust through transparency.

From the Digital Euro Association's (DEA) standpoint, collaboration emerged as a central theme. Acknowledging the evolving payment landscape, the DEA emphasized the integration of Central Bank Digital Currencies (CBDCs) with traditional and emerging payment methods. Only a single inquiry addressed the role of stablecoins, despite their increasing relevance, while Bitcoin and other cryptocurrencies were absent from the realm of discussion.

A complete recording of the Public Hearing is accessible on the Bundestag's website (in German language):

All quotes have been translated from German into English.

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