Deutsche Bank Publishes Crypto Money Report

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Deutsche Bank released its report on cryptocurrencies today. In this report, the bank specifically evaluated digital central bank currencies (shortly CBDC) and the advantages and disadvantages of these digital currencies.

While Europe was shaken by cryptocurrency regulations and CBDC discussions, Deutsche Bank took a step towards this issue. In its report published today, the bank examined what digital central bank currencies are, what advantages they provide to banks and citizens, and how these currencies will affect states.

CBDC Can Change The Financial World

Digital central bank coins; It is the digital equivalent of fiat currencies. These coins are from traditional money because they are digital; They differ from cryptocurrencies because they are connected to a certain center (state). A survey conducted by the Bank for International Settlements (BIS); showed that currently more than 80% of central banks in the world are considering the idea of ​​digital central bank money. Among them are China, which has started developing the digital yuan project, Sweden working on e-krona, and many other countries that have taken action for the digital lira.

Deutsche Bank; announced that digital central bank coins can offer these countries many different advantages. Saying that transactions made with digital money can be done faster and easier, experts also stated that central banks can follow more flexible policies thanks to digital currencies. Although Deutsche Bank said that these currencies could cause problems such as privacy, scalability and regulation, CBDC emphasized that they have the potential to radically change financial transactions.

Central Banks Will Relax

Central banks can change their policies as a result of sudden changes in the economy. However, the effects of this change cannot be felt directly, as central banks affect the economy over commercial banks. Deutsche Bank; He explained that the central bank can eliminate these “intermediaries” and put economic policies into practice, thanks to digital money.

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Deutsche Bank also states that the negative interest rate policy can be implemented more effectively thanks to the digital central bank money. Central banks can lower their interest rates by using digital money instead of cash, encouraging citizens to ‘spend’ money and as a result, fuel economic activities.

Tighter Capital Control

Transferring money to digital environment; It also means that a digital record of transactions made with that money will be kept. According to the research of Deutsche Bank, central banks can keep their capital controls much more tight in this way. Thanks to the digital central bank money, transactions made within the country can be followed more easily.

According to the report of Deutsche Bank, this will not only give more power to the central bank but also means that the state budget can be used more effectively. With digital money, governments can provide financial assistance to citizens receiving social assistance in a shorter time, records of these transactions can be kept more securely, and social policies can be carried out more efficiently in general.

Digital Money Should Not Be Underestimated

Except for Venezuela, it is not known how useful these coins will be, as there is no country that has yet to issue its own digital currency and put it into use on a large scale. Beyond that, it is not even clear what technology will be used for a possible CBDC project. Although eyes initially go to distributed ledger technologies (DLT) such as blockchain, how scalable these technologies are is another unknown.

Deutsche Bank stated that digital currencies should not be taken lightly, despite all this uncertainty. Stating that “more effective monetary policies can be prepared” and corporate companies can be “managed more transparently” thanks to digital money, the bank gave the message that it will continue to follow developments in the field of digital money.


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