Germany is one of the few countries in Europe that is trying to develop an alternative solution to a CBDC(Central Bank Digital Currency). France has already worked on two joint CBDC projects, along with Ukraine and Sweden, who also have plans for a potential CBDC.
Germany’s Central Bank, Deutsche Bundesbank, has been one of the main proponents of a CBDC alternative with the help of blockchain technology. It carried out a project with the help of major banks like Barclays, Citibank, Commerzbank, DZ Bank, Goldman Sachs, and Germany’s Finance Agency. According to the test, the platform relies on two software modules that connect the present payment system with digital ledger technology. The bank has also highlighted the efficacy of blockchain technology in making online transactions easier to manage.
Bundesbank is also not on board with a digital euro as it feels it is unnecessary and will require a lot more time to look into. Although the likelihood of Germany’s actions having an impact on the European Central bank’s resolution on issuing a digital currency is very low.
This conclusion of the Central bank of Germany may be a really smart move in the future, assuming CBDCs end up failing for some .It is interesting to see where this will lead Germany as it has the largest national economy in Europe.