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



  • Firstly, numerous studies analyze the advantages of blockchain-based systems over existing centralized systems in detail. Examples are publications by the Bank of England (2020), Consensys (2020), Riksbank (2020), ECB (2019a), OMFIF, and IBM (2019), Committee on Payments and Market Infrastructure (2017) and Deloitte and Monetary Authority of Singapore (2017).
  • Secondly, the world’s most prominent projects addressing the digitization of money have also mainly chosen blockchain technology as their underlying technology. These projects include the already well-progressed central bank digital currency (CBDC) efforts of the Swedish and Chinese central banks and the Facebook-initiated Libra project. These initiatives aim to bring existing fiat currencies on blockchain systems and might go live within the next few years. Less progressed, for example, are projects by the Banque de France, the Deutsche Bundesbank, and the European Central Bank (ECB). However, also, these institutions conducted initial pilot tests or are in the process of setting up prototypes based on blockchain technology.
  • Thirdly, Chapter 2 explains in detail why blockchain technology is a suitable technological basis for the digital, programmable Euro.

1. Introduction

1.1 Cash and electronic money

1.2 The digital Euro and the programmable Euro

2. Reasons for the programmable Euro

Figure 1: Reasons for the programmable Euro

2.1 Cross-border payments and trade finance

2.2 Automation

2.3 Integration of delivery versus payment (DvP) and digital representation of assets and rights

2.4 Micropayments and ‘streaming money’

2.5 Other reasons

3. Use cases for the programmable Euro

3.1 Cross-border payments and trade finance

3.2 Industry 4.0, Machine Economy, Internet of Things, Logistics 4.0

3.3 Financial sector and capital markets

4. Issuance of the programmable Euro

Figure 2: Taxonomy for programmable money

4.1 Central bank issues the programmable Euro

4.1.1 Wholesale CBDC: the programmable Euro for interbank and securities trading

4.1.2 Retail CBDC: the programmable Euro for the general public The direct model of a retail CBDC The indirect model of a retail CBDC The hybrid or fiduciary model of a retail CBDC Evaluation of CBDC models

4.1.3 Machine CBDC: the programmable Euro for machines

4.2 Private organization issues the programmable Euro

4.2.1 Commercial bank money: issued by regulated organizations (e.g., banks)

4.2.2 Private stablecoins: issued by unregulated organizations Private stablecoins backed by one fiat currency Private stablecoins backed by a basket of currencies Private stablecoins backed by crypto assets

4.3 Interoperability of the programmable Euro

5. Conclusions

5.1 Central claim: Promoting dialogue and uniform regulatory framework

5.1.1 Necessity of a broad dialogue between finance, industry, retail and institutions

5.1.2 Performing test runs of the programmable Euro for different use cases

5.1.3 Establishing a single regulatory framework

5.2 Global interest in the blockchain-based programmable Euro

5.2.1 Blockchain as the technological basis

5.2.2 International interest in blockchain-based currencies

5.2.3 China as a pioneer

5.2.4 Experiments in Europe and the USA

5.3 Implementation models for the programmable Euro

5.3.1 Wholesale and retail CBDC: First access for banks, then for everybody

5.3.2 Private sector solutions by commercial banks and financial service providers

5.3.3 Design principles of the programmable Euro: stability and anonymity






Professor | Lecturer | Author | Investor | Frankfurt School Blockchain Center

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Philipp Sandner

Philipp Sandner

Professor | Lecturer | Author | Investor | Frankfurt School Blockchain Center

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