Euro-Tokens: Will the German Government Implement Blockchain-based Crisis Tokens?
German lawmakers are discussing “Euro Tokens” to distribute financial aid to companies and households during the corona-crisis. Is this the birth of state-owned blockchain infrastructure?
It could be the beginning of a huge success story: The German government is currently discussing Euro-tokens to distribute state support during the corona-crisis. Via blockchain tokens, the government could support businesses and households directly and unbureaucratically in addition to the loans provided by the state-owned KfW bank.
The idea is quite simple. Instead of going through a bureaucratic and time-consuming procedure to apply for subsidies, companies identify on a blockchain and apply for government loans digitally. Should the company be entitled to state aid, euro tokens could be made available immediately, automatically, transparently and unbureaucratically. This would save costs and cut processing times significantly.
Business loans and consumer vouchers on the blockchain
A Euro token-infrastructure would not only provide fast liquidity to companies but could also distribute consumer vouchers to citizens. What would otherwise be a bureaucratic nightmare, a blockchain could handle with relatively little effort.
Blockchain-based vouchers could also reach the underbanked – people who do not have a bank account, for example, because they do not have identification documents. They could obtain digital wallets from post offices to receive consumer vouchers even without a bank account. A similar idea was discussed in the US Congress last week, referred to as a “digital dollar” by the media.
Blockchain becomes more popular among lawmakers
Germany’s Digital Minister Dorothee Bär supports the idea, not only for the corona-crisis but also in the long term. “Blockchain-based identities could create a Germany-wide company register so that smaller companies, in particular, could participate more quickly and easily in government programs,” said Bär to the Handelsblatt.
Likewise, member of parliament Thomas Heilmann thinks the government should “definitely promote euro tokens because we could learn from such a project and finally make progress with digital identities.”
The Ministry of Finance says, “the idea of distributing direct state subsidies to companies and consumers from the state budget via a blockchain-based solution is currently being investigated.”
Long story short: Blockchain can provide solutions for crisis management, and German lawmakers are starting to realize the opportunities. Whether or not the government will implement such a system anytime soon is written in the stars. But the lessons learned from this crisis could lead to the development of such an infrastructure.
And in the long term, much more could come out of it. The government could use the same infrastructure to distribute social benefits, and perhaps it could also lay the foundation for a digital euro issued by the central bank.