‘All that glisters is not gold?’ The digital euro between myth and reality

Abstract

Central bank digital currencies (CBDCs) are being studied and tested in many countries. The European Central Bank (ECB) and the European Commission have been working on an EU CBDC, the digital euro, since 2020. On 28 June 2023 the European Commission adopted a proposal for a regulation establishing the digital euro. This paper, after contextualizing CBDCs in the wider group of digital currencies, analyses the legal and technical design issues emerging from the legislative initiative of the European Commission and from the ongoing preparatory phase of the ECB. Despite the ‘myth’ that the introduction of an EU CBDC could have potentially disrupted the way in which traditional banks and financial institutions work, the reality seems that the proposed digital euro is solidly under the control of the ECB. Thus it is crucial, to ensure full ECB accountability, that the EU decision-making institutions, and in particular the Parliament, engage fully in the legislative procedure.