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Digital Euro: Frequently Asked Questions Revisited

Author

Listed:
  • Joe Cannataci
  • Benjamin Fehrensen
  • Mikolai Gutschow
  • Ozgur Kesim
  • Bernd Lucke

Abstract

The European Central Bank (ECB) is working on the "digital euro", an envisioned retail central bank digital currency for the Euro area. In this article, we take a closer look at the "digital euro FAQ", which provides answers to 26 frequently asked questions about the digital euro, and other published documents by the ECB on the topic. We question the provided answers based on our analysis of the current design in terms of privacy, technical feasibility, risks, costs and utility. In particular, we discuss the following key findings: (KF1) Central monitoring of all online digital euro transactions by the ECB threatens privacy even more than contemporary digital payment methods with segregated account databases. (KF2) The ECB's envisioned concept of a secure offline version of the digital euro offering full anonymity is in strong conflict with the actual history of hardware security breaches and mathematical evidence against it. (KF3) The legal and financial liabilities for the various parties involved remain unclear. (KF4) The design lacks well-specified economic incentives for operators as well as a discussion of its economic impact on merchants. (KF5) The ECB fails to identify tangible benefits the digital euro would create for society, in particular given that the online component of the proposed infrastructure mainly duplicates existing payment systems. (KF6) The design process has been exclusionary, with critical decisions being set in stone before public consultations. Alternative and open design ideas have not even been discussed by the ECB.

Suggested Citation

  • Joe Cannataci & Benjamin Fehrensen & Mikolai Gutschow & Ozgur Kesim & Bernd Lucke, 2026. "Digital Euro: Frequently Asked Questions Revisited," Papers 2601.18644, arXiv.org.
    • Handle: RePEc:arx:papers:2601.18644
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    References listed on IDEAS

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    2. World Bank, 2020. "Philippines Digital Economy Report 2020," World Bank Publications - Reports 34606, The World Bank Group.
    3. Oecd, 2023. "Consumer vulnerability in the digital age," OECD Digital Economy Papers 355, OECD Publishing.
    4. Robert DeYoung & Tara N. Rice, 2004. "How do banks make money? a variety of business strategies," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 28(Q IV), pages 52-67.
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