Heiko Maas was focused on nuclear deals when he made a statement [1] in favour of creating an independent, European payments channel that does not rely on the US.

As part of his foreign policy work I am sure the bundes-minister prudentially considers the financial implications of his strategy. A resilient infrastructure is key, but as 19th Century Englishmen would probably argue "Is it worth digging canals when we could be laying railways?"

SWIFT v Blockchain

SWIFT has aimed to improving their global payments network without the usage of Blockchain, through its 18-month old Global Payments Innovation (GPI) service. The standard seems to be closed, and not compatible with DLT/Blockchain [2]. If 100+ financial institutions have joined RippleNet to take advantage of global payments leveraging DLT technology, maybe the GPI 1-Day settlement is not as competitive as SWIFT might have expected. Furthermore new contenders in the Fintech space are adding additional functionality that go beyond payments. Usage of Nostro/Vostro accounts and other core competencies can be built on platforms taking full advantage of network accessibility. If emergent economy banks leapfrog their payments infrastructure to take full advantage of these developments, will the non-compatible GPI be worth it?

Europe is able

The mind-set for a platform infrastructure is the European zeitgeist. The 5th AML directive aims to ensure cross-collaboration across EU27 Financial Investigation Units through shared registers [3]. Europe is building its infrastructure at a Union-level. Some of Mr. Maas' colleagues such as Vice-Chancellor and Minister of Finance Olaf Scholz have shown some concern around Blockchain [4] but ultimately our German friends should weaken their scepticism as even the ECB has started exploring potential uses of Blockchain technology [5]. Private institutions are behind DLT, and public institutions are not far behind.

Bold statements are good. Delivering on them is ultimately the greater reward.


Note: All linked items were accessed on 22/08/18, cached versions should be available for this date.