Deutsche Bank, the largest banking institution in Germany, is confident that central bank digital currencies, or CBDCs, will replace cash in the future.

The bank’s research arm, Deutsche Bank Research, published a new report on economic estimations and proposals to assist global economies hit by the coronavirus pandemic. Titled “What We Must Do to Rebuild,” the study was released on Nov. 10.

In the report, Deutsche Bank states that the ongoing COVID-19 pandemic has accelerated the “digital cash revolution.” According to the bank, this revolution will eventually enable CBDCs like China’s digital yuan or Sweden’s e-krona to replace cash in the long term. Deutsche Bank called on national governments and private companies to work on alternatives to credit cards, stating:

“Worldwide lockdowns and social distancing measures have only increased the use of cards over cash. To respond, companies and policymakers must design alternative to credit cards and remove middle man fees. [...] For now, the priority must be on regional digital payment systems. In the long term, central bank digital currencies will replace cash.”

In the report, Deutsche Bank Research also warned European policymakers about the risks of not developing their own digital currency project in response to China and Sweden’s active progress in the field.

The bank argued that lagging behind other jurisdictions might force the adoption of policies by first movers:

“If other countries do not catch up, they may find that their companies are forced to adopt the digital currencies and policies of other countries as payment mediums.”

The bank called on Europe to develop a digital currency solution in order to strengthen the euro and in the existing geopolitical situation. “To do this, we must have an independent European payment solution,” Deutsche Bank Research wrote.

While Deutsche Bank is pushing for the accelerated development of a global digital currency development, a number of countries are in no hurry to issue a CBDC.

In October 2020, Jerome Powell of the United States’ Federal Reserve declared that the U.S. is not worried about other countries getting a first-mover advantage when it comes to issuing CBDCs. The Fed chairman said that the U.S. government will not make a decision on issuing the digital dollar until CBDC-associated risks like cyber attacks and privacy are resolved.

Officials in New Zealand and Russia have expressed a similar stance, stating that they would rather take a “wait-and-see” approach.