Digital Euro Regulation (cepPolicyBrief)

"The ECB and the Commission should refrain from introducing a digital euro at this time. There is no market failure. Especially as there are alternatives to the digital euro that are less intrusive, do not require excessive market intervention and do not unduly distort competition in the payment markets. Furthermore, the digital euro does not offer any immediate added value that would justify its costly introduction," says cep financial expert Victor Warhem. The economist from cep Paris has analysed the risks of a digital euro with cep financial experts Anastasia Kotovskaia and Philipp Eckhardt from cep Freiburg/Berlin.

According to the cep researchers, establishing the digital euro as a legal tender would signal that the Commission itself does not believe in a broad acceptance of the digital euro. "It makes little sense to forcibly introduce a new public means of payment that is of little benefit to citizens on its own and whose acceptance obligation entails enormous costs for payment recipients, e.g. merchants," warns Anastasia Kotovskaia. Furthermore, from a legal perspective, the ECB is not even authorised to issue a digital euro in the planned form.

According to Eckhardt, banks should be free to decide whether they want to offer digital euro services - or not. Otherwise, they could be forced to invest money in a non-viable and potentially unprofitable business model. Eckhardt also considers the proposals to limit fees and charges to be strange. With such limits, the Commission is trying to remedy an alleged market failure that cannot yet exist because the market does not even exist yet.