Deutsche Bank, the largest banking institution in Germany, believes central bank digital currencies will replace cash in the future.
In a recent report, “What We Must Do to Rebuild,” the bank’s research arm, Deutsche Bank Research, discussed economic estimations and proposals to assist global economies hit by the coronavirus pandemic, according to a report in CoinTelegraph.
In the report, Deutsche Bank stated that the ongoing COVID-19 pandemic has accelerated the “digital cash revolution.”
According to the bank, this revolution will eventually enable CBDCs like China’s digital yuan or Sweden’s e-krona to replace cash in the long term. Deutsche Bank called on national governments and private companies to work on alternatives to credit cards.
A statement released by the bank said, “Worldwide lockdowns and social distancing measures have only increased the use of cards over cash. To respond, companies and policymakers must design alternative to credit cards and remove middle man fees. For now, the priority must be on regional digital payment systems. In the long term, central bank digital currencies will replace cash.”
In the report, Deutsche Bank Research warned European policymakers about the risks of not developing their own digital currency project in response to China and Sweden’s progress in the field. The bank argued that lagging behind other jurisdictions might force the adoption of policies by first movers.
“If other countries do not catch up, they may find that their companies are forced to adopt the digital currencies and policies of other countries as payment mediums.”
The bank called on Europe to develop a digital currency solution in order to strengthen the euro and in the existing geopolitical situation. “To do this, we must have an independent European payment solution,” a spokesperson for the bank stated.