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- Deutsche Bank has displayed Bitcoin in a tweet at the heart of a digital currency system that links several fiat currencies.
- The corona pandemic could turn out to be the reason for abolishing cash and introducing digital cash, while industry experts, like Meltem Demirors, are warning of an “unprecedented government surveillance”.
As CNF reported yesterday, the Bank for International Settlements (BIS), also known as the “Central Bank of Central Banks”, has released a report that the corona pandemic could promote the elimination of cash and the introduction of digital currencies. A new study by Deutsche Bank researchers also sees COVID-19 as a great opportunity to renew the old currency system by forcing the transition to digital cash.
Remarkably, Deutsche Bank considers that Bitcoin (BTC) could play a central role. On 3 April, Germany’s largest bank tweeted an image of a Bitcoin symbol at the heart of a digital network linking several fiat currencies such as the euro, US dollar, pound sterling and yen.
In the tweet, however, Deutsche Bank made no reference to Bitcoin, but referred to the risk factor cash in spreading the coronavirus:
The COVID-19 pandemic is accelerating the rise of central bank #digitalcurrencies as many governments see the handling of cash as a potential risk factor. This will likely add to calls to move towards #digitalcash according to our #dbresearch colleague
In another tweet, Deutsche Bank added:
A once-in-a-century pathogen demands once-in-a-century solutions. An obvious place to start is to accelerate the inevitable shift toward #digitalcash.
COVID-19 as a reason for the removal of cash?
The bank’s researchers refer to an article entitled “The COVID-19 Cash Out” written by Marion Laboure, a macro strategist at Deutsche Bank, Jürgen Braunstein from the Belfer Center for Science and International Affairs at Harvard, and Sachin Silva, a PhD student at Harvard. In the report, they explain that governments increasingly view the handling of cash as a potential source of infection. Therefore, COVID-19 could be a catalyst for the introduction of digital cash, according to Deutsche Bank experts:
While Chinese authorities have been destroying banknotes that have potentially come into contact with the coronavirus, Western countries remain woefully behind not just in their response to the pandemic, but also in adopting digital payments. One silver lining to the COVID-19 crisis is that this may soon change.
As the report goes on to say, digital versions of the cash currency, such as the recently announced Swedish e-Krona, are “promising examples of what could come”. However, while commercial banks and central banks around the world are promoting the introduction of a digital currency, experts of the crypto industry are warning about the introduction of a digital US dollar or a digital euro. As Meltem Demirors, Chief Strategy Officer of CoinShares, recently said, they are “the opposite of what crypto is all about”.
In the tweet storm, Demirors warned, using the example of Sweden, why digital cash will lead to “unprecedented government surveillance”. As Demirors explained, Sweden has become a cashless society where everyone uses a payment application called “Swish”. To use the app, however, users have to own a bank account and link it to their identity by means of an ID card and telephone number.
it’s about linking your bank account directly to a federal agency so they can move 0s and 1s in their database. and when you do that, you have basically completed the loop for the gov’t, eliminating the need to go through intermediaries to get your data by tying what people need (economic relief) to what the gov’t wants (access to your bank account), you kill 2 birds w 1 stone. […] we are entering an era of unprecedent government surveillance, all implemented in the name of “emergency relief”
