Bundestag member Joana Cotar has called for the adoption of Bitcoin as legal tender in Germany and voiced concerns over the risks associated with the digital euro.
In an interview with Cointelegraph, Cotar described herself as “a staunch opponent of the digital euro.” She said the centralized digital currency could enable banking authorities to impose restrictions on payments and ownership, potentially leaving citizens vulnerable and at the mercy of government. She noted the Chinese social credit system as a cautionary example.
“The digital euro would also mean that each and every one of us could be totally monitored. As a convinced libertarian, I emphatically reject this,” said Cotar.
In contrast, Cotar asserts that Bitcoin’s decentralized structure better aligns with Germany’s values of individual liberty and financial autonomy and fosters financial freedom and personal privacy.
Germany developing legal framework for Bitcoin
Cotar is now leading a “preliminary examination” to develop a legal framework that would officially recognize Bitcoin as a legal tender.
Her approach extends beyond simply adopting digital currency as she also aims to establish a balanced regulatory framework. She emphasized Bitcoin’s freedom aspects, including robust security standards, privacy protection and a non-restrictive regulatory approach, while addressing potential risks like money laundering and tax evasion.
To further her cause, Cotar initiated the “Bitcoin in the Bundestag” campaign within the German legislative body. It aims to educate fellow politicians on Bitcoin’s advantages, fostering informed decision-making.
Unlike her peers who advocate for a broader cryptocurrency approach, Cotar focuses solely on Bitcoin. She firmly believes in Bitcoin’s unique technological characteristics and its transformative potential for society.
Cotar’s proposal includes incorporating Bitcoin for tax payments and fees and using Bitcoin mining to enhance power grid stability. If the proposal succeeds, Germany’s acknowledgment of Bitcoin as a legal tender could significantly impact the nation’s monetary framework.
As an economic powerhouse, Germany could push other countries to reevaluate their stance on Bitcoin. This is because Germany’s participation in the market will boost the token’s credibility. So far, only El Salvador and the Central African Republic have adopted Bitcoin as legal tender within their borders.
Germany’s adoption of Bitcoin could also attract more institutional and individual investors, leading to a more stable and upward trajectory in Bitcoin’s valuation.
Standing against ECB’s initiative
Cotar’s viewpoint contrasts with the ongoing project of the European Central Bank (ECB) to create a central bank digital currency (CBDC), dubbed the “digital euro.”
The ECB, led by President Christine Lagarde, moved into the preparation phase of the project on October 18. The digital euro is anticipated to ease transactions and boost financial inclusion. The central bank emphasized that the digital currency would complement the physical euro, not replace it.
The ECB has finalized its comprehensive crypto-asset legislation, the Markets in Crypto-Assets Regulation (MiCA), to support the project and other digital currencies. The second consultation concluded last month. This landmark regulation will take effect in 2024.
While many local regulators enthusiastically endorse the digital euro and highlight its advantages, there are dissenting voices, including Cotar.
Despite the ECB’s assurances of its disinterest in users’ personal data, concerns linger that its plans for the digital euro could expand surveillance and data collection. Privacy advocates fear this data could be used to track and monitor individuals.
The ECB collaborates with European institutions to shape the optimal design of the digital euro, ensuring it fits the public needs and preferences. At the same time, countries like Ireland, Spain, France and Italy are also actively exploring digital euro prototypes.