The digital euro in the digital age : Can we really digitise cash?

Abstract

Central banks around the world are considering the introduction of retail central bank digital currency. The European Central Bank, for example, has made considerable progress in this respect, and its research into the viability of a digital euro is at an advanced stage. Given, however, that people living in the euro area have been using various forms of digital payments for a number of years, a key question is what the benefits of such an innovation would be, aside from a reduced dependence on payment processors from outside the EU. A digital euro that retained the properties of physical cash, such as anonymity, offline payments and high inclusion, could provide added value compared with existing digital payment solutions. This paper explores whether and how fast-developing technology might be used to implement a cash-like digital euro. This type of resemblance to cash could eventually be more important for wide adoption than the difference in liability between central and commercial bank money.