“At a time of challenges on all fronts, expecting people and companies to bear these costs without gaining any real benefits is difficult to justify,” says Dr. Joachim Schmalzl, Executive Member of the Board of the Deutscher Sparkassen- und Giroverband (DSGV) [German Savings Bank Association]. “The study confirms that the project as it currently stands is putting other innovation initiatives at risk and will tie up staff resources for years. A digital euro can only be successful if it can demonstrate that using it will offer genuine added value – and this is something that can only be achieved with the involvement of the banks.”
Based on the current planning, banks and savings banks will have to allocate almost half of their available IT and payments processing specialists to implementation of the digital euro, despite a lack of demand for it. “Many people cannot currently see any discernible advantages from the digital euro and still have questions, such as about the need for this new payment method, its benefits, and the role of the state,” explains Schmalzl. “The existing payment systems already work exceptionally well, whether card, app, or wallet.”
Furthermore, international technology firms could receive an unintended boost as the open, government-funded infrastructures created by the European Central Bank (ECB) could give them much easier access to European payments processing, to the detriment of European providers.
Tanja Müller-Ziegler, member of the Board of Managing Directors of the Bundesverband der Deutschen Volksbanken und Raiffeisenbanken (BVR) [National Association of German Cooperative Banks], states: “Banks are keen to be innovative and we do not shy away from investment, but the duplication of structures is not in the interests of customers. A solid legal framework is required too. The digital euro must strengthen rather than harm the competitiveness of European providers. What is at stake is no less than European sovereignty in the payments processing sphere, particularly in view of the geopolitical risks. The digital euro could, however, contribute to Europe’s resilience if it is designed in the right way. It must not be allowed to supplant existing private-sector systems but rather complement them only where there is evidence of a tangible benefit for everyone.”
The two associations are calling for a less complex digital euro with a clear division of roles between the public and private sectors. There also needs to be a greater focus on existing private-sector European solutions, such as Wero, which are already showing how digital payments processes can function across Europe without government intervention. “Instead of a parallel world, we need the existing infrastructure to be enhanced in cooperation with the banking industry and for it to offer genuine added value for consumers and businesses alike,” says Müller-Ziegler.