On September 26, 2021, the elections to the 20th German Bundestag will take place. Even though we believe that there are a few other important topics, we have looked in the manifestos to see what positions the parties take on payment issues. We limited ourselves to the seven parties that are currently represented in the German Bundestag (CDU/CSU, SPD, AfD, FDP, Die Linke, Bündnis 90/Die Grünen). As a source, we used the manifestos that were available for download on 09.07.2021. The CDU and CSU have submitted a joint manifesto. The party Die Linke had only published a draft manifesto at that time. To better compare the different positions, we formed topic areas that the manifestos deal with. Our analysis produced some exciting results. It might still have been expected, that the AfD is primarily concerned with cash (preferably in the form of the deutschmark). But would you have thought that Die Linke is a fan of the payment industry? Or that FinTechs are already yesterday’s news?
But read it for yourself:
Almost all of the manifestos we analyzed dealt with the issue of cash. That’s remarkable because cash isn’t all that new. However, some parties are obviously concerned about our cash. As many as five parties (CDU/CSU, AfD, FDP and Die Linke) clearly want to have the possibility of using cash. Two parties (AfD and FDP) want unrestricted use of cash. It is unclear whether this simply means that there should be no upper limits on cash payments or whether anonymous cash payments should also be possible in any amount. The latter would require a change in the current legal situation in the European Union. Only one party (Bündnis 90/Die Grünen) writes something about cash caps in its manifesto: it would like to “examine the introduction of a high upper limit.”
Central Bank Digital Currency
Five parties take a position on central bank digital currency in their manifestos (CDU/CSU, AfD, Die Linke, Bündnis 90/Die Grünen). Except for the AfD, which rejects central bank digital currency, these parties (i.e. CDU/CSU, Die Linke, Bündnis 90/Die Grünen) are in favor of central bank digital currency. The party Die Linke even wants private individuals to be able to hold limited amounts of the digital euro without interest in current accounts at the ECB.
Private Crypto Currencies
The picture is somewhat more mixed when it comes to privately issued crypto currencies. Only the FDP is clearly in favor of crypto currencies in its manifesto. However, it is not completely clear whether the corresponding statement refers only to privately issued crypto currencies or also includes central bank digital currency. Three parties (SPD, Die Linke, Bündnis 90/Die Grünen) are more skeptical in this regard. SPD and Die Linke generally reject privately issued crypto currencies. Bündnis 90/Die Grünen seem to limit their rejection only to privately issued cryptocurrencies of “powerful large corporations.” Also, they want to “sound out the opportunities and risks of cryptocurrencies in a differentiated manner.” What is remarkable about the SPD’s position is that this is the only topic area in the field of payments on which it explicitly takes a position in its manifesto.
Innovative Financial Products
The topic area of innovative financial products, for which the German Federal Ministry of Finance has set up the German FinTech Council, does not play a major role in the parties’ manifestos. When parties do write something about this, it reads more like empty phrases than content. The CDU and CSU, for example, think that “everyone should benefit from new, digital payment options and financial services,” but rather refers to the fact that this must be done in a lawful manner. Things get even a little vaguer with Bündnis 90/Die Grünen. They think that digital payment is convenient and fast, but should be made even more secure. The Left Party demands that FinTechs “must be subject to the same rules and laws with their financial services as apply today to conventional financial service providers (e.g., banks and insurance companies).” This requirement is in line with the current legal situation in Germany.
Financial Regulation in the Payment Industry
Only the manifestos of the current opposition parties contain a statement on financial regulation in the Payment Industry. The FDP and Bündnis 90/Die Grünen believe that there is a need for action on regulation. This is hardly surprising because this position was already apparent in the course of the parliamentary Committee of Inquiry on the Wirecard case. The party Die Linke, which played an active role in this Committee of Inquiry through Fabio de Masi, merely calls for equal treatment of FinTechs with other market participants in its manifesto (see above). It also finds that the financial sector should be focused on “socially meaningful core tasks.” Among these core tasks, Die Linke lists payment services first and foremost. Now that’s a compliment to the sector!
Anti-money Laundering in the Payment Industry
The party Die Linke and Bündnis 90/Die Grünen have something to say about combating money laundering in the payment industry. In this area, they call for changes in law enforcement (Die Linke) or the identification of the “actual beneficial owner” for “all digital payments and cryptocurrencies” as well as “clear rules for the area of digital payments” (Bündnis 90/Die Grünen). As a lawyer who advises in this area, I still go along with the clear rules. But what does the Bündnis 90/Die Grünen means by identifying the beneficial owner for digital payments, I frankly didn’t understand. CDU/CSU, which have been criticized by various media for their arbitrariness, have a remarkably concrete demand in their manifesto on the topic of combating money laundering: the exchange of cash for cryptocurrency and vice versa should only be possible “by means of banks that must first verify the identity and origin of the money as part of an existing business relationship.” If this is meant seriously, corresponding crypto service providers would have to have a banking license in the future. I think this is an interesting demand, also in light of the planned crypto regulation at the European Union level.
What comes after the election?
Since many demands are limited to maintaining the legal status quo, I do not expect any meaningful changes to the regulatory requirements for the payment industry in Germany due to the upcoming Bundestag elections. This is true regardless of which parties will form the government in the future. This result is also unsurprising, considering that regulation of the payment industry essentially takes place at the level of the European Union. However, as a member of the payment community, I appreciate that all parties in the Bundestag have something to say about our issues in their manifestos. Not all industries in Germany can claim that.
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