- Deutsche Bank has published a tweet showing Bitcoin at the center of a digital currency system linking several fiat currencies.
- The corona pandemic could prove to be a reason for eliminating cash and introducing digital cash, with industry experts, such as Meltem Demirors, warning of „unprecedented government surveillance“.
The Bank for International Settlements (BIS), also known as the „central bank of central banks“, has released a report that the corona pandemic could encourage cash elimination and the introduction of digital currencies. A new study by researchers at Deutsche Bank also see a great opportunity for COVID-19 to renew the old currency system by forcing the transition to digital cash.
Remarkably, Deutsche Bank could give Bitcoin (BTC) a central role. On April 3rd, the largest German bank twittered a picture of a Bitcoin symbol in the centre of a digital network linking several fiat currencies such as the euro, the US dollar, the British pound and the yen.
In the tweet, however, Deutsche Bank made no reference to Bitcoin, but referred to the risk factor cash in the spread of the coronavirus (freely translated):
The COVID 19 pandemic is accelerating the rise of central banks‘ digital currencies, as many governments see cash handling as a potential risk factor. This is likely to contribute to the calls for a switch to digital cash, according to our colleague from Deutsche Bank Research.
In another tweet, those responsible at Deutsche Bank added
A virus that occurs only once in a century requires solutions only once in a century. An obvious starting point is to accelerate the inevitable transition to digital cash.
COVID-19 as a reason for the elimination 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 of 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 cash management as a potential source of infection. Therefore COVID-19 could be a catalyst for the introduction of digital cash, according to Deutsche Bank experts:
The Chinese authorities have destroyed banknotes that may have come into contact with the corona virus, and Western countries are regrettably lagging behind not only in responding to the pandemic but also in introducing digital payments. A bright light on the horizon of the COVID 19 crisis is that this could soon change.
As the report goes on to say, digital versions of the cash currency, such as the recently announced Swedish e-Krone, are „promising examples of what could be coming. However, while commercial and central banks around the world are promoting the introduction of a digital currency, experts in the crypto industry are warning against the introduction of a digital US dollar or digital euro. As CoinShares Chief Strategy Officer Meltem Demirors recently said, they are „the opposite of what crypto is all about.
In the Tweetstorm, using the example of Sweden, Demirors warned of why digital cash will lead to „unprecedented government surveillance“. As Demirors explains, Sweden has become a cashless society where everyone uses a payment application called „Swish“. To use the app, however, users must have a bank account and link it to their identity by means of ID and telephone number.
The idea is to link your bank account directly to a federal agency so that they can move 0 and 1 in their database. And when you do that, you’ve basically closed the government loop, so that they don’t have to go through intermediaries to get your information.
By linking what people need (economic support) to what the government doesn’t want (access to your bank account), you kill 2 birds with one stone. We are entering an era of unprecedented government surveillance, carried out in the name of „emergency intervention“.