The Digital Euro: An (almost) perfect equivalent to cash?

Abstract

Money and payment systems are undergoing transformative changes as a result of digitization, diminishing the importance of traditional cash. Concurrently, increased digitization of payment is reducing access to central bank money for persons who are unable to hold accounts at the central bank. The European Commission, with its draft regulation on the Digital Euro published in June 2023, joins the list of projects that aim to create a digital alternative to the existing cash system. This article analyzes the Commission proposal from a contract and financial market law perspective. As a key focus, the paper addresses the proposed design of the payment infrastructure and currency unit and examines the legal relationships between the European Central Bank (ECB) as the issuer of the digital euro, its users, and supporting intermediaries.