REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the establishment of the digital euro
Date: 2022-04-05
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU financing, financial services

CALL FOR EVIDENCE 
FOR AN IMPACT ASSESSMENT 

This document aims to inform the public and stakeholders the Commission's future legislative work so they can provide feedback 
on the Commission's understanding of the problem and possible solutions, and give us any relevant information that they may 
have, including on possible impacts of the different options. 

TITLE OF THE INITIATIVE 

A digital euro for the EU 

LEAD DG (RESPONSIBLE UNIT)  DG Financial Stability, Financial Services and Capital Markets Union (B3, 

B5), and DG Economic and Financial Affairs  (A2, C3, C5) 

LIKELY TYPE OF INITIATIVE 

Regulation 

INDICATIVE TIMETABLE 

Q1-2023 

ADDITIONAL INFORMATION 

Insert  a  link  to  a  website  (either  the  specific  one  for  the  initiative  or  a  website 
covering the policy area (if there is none, put: – in the field). 

This document is for information purposes only. It does not prejudge the final decision of the Commission on whether this initiative 
will be pursued or on its final content. All elements of the initiative described, including its timing, are subject to change. 

A. Political context, problem definition and subsidiarity check

Political context 

In March 2021, the Euro Summit called1 for a stronger and more innovative digital finance sector and more efficient 
and resilient payment systems, and stated that exploratory work on a central bank digital currency, the digital euro, 
should  be  taken  forward.  A  digital  euro  is  a  central  bank  liability  offered  in  digital  form  for  use  by  people  and 
businesses, which would complement cash and private payment means. 

The Council recommendation on the economic policy of the euro area for 2022 also stressed that depending on its 
design,  a  central  bank  digital  currency  could,  among  other  things,  offer  a  supply  of  public  money  in  digital  form, 
support the digitalisation of the European economy, actively encourage innovation in retail payments and contribute 
to strengthening the international role of the euro and Europe’s open strategic autonomy. 

The  digital  finance  and  retail  payment  strategies  of  the  Commission2  adopted  in  September  2020  supported  the 
emergence  of  competitive  pan-European  payment  solutions  and  the  exploration  of  a  digital  euro  as  a  possible 
complement  to  euro  cash,  which  is  legal  tender  by  virtue  of  the  treaties  and  the  EU  legislation.  The  ECB’s  retail 
payment strategy shares similar objectives

. 

3

The ECB issued its report on a digital euro in October 2020 and ran a public consultation on a digital euro between 
October 2020 and January 2021. In July 2021, the Governing Council of the ECB decided to start an investigation 
phase4 on a digital euro project in October 2021.  

1 https://www.consilium.europa.eu/media/48975/25-03-21-eurosummit-statement-en.pdf 
2 https://ec.europa.eu/info/publications/200924-digital-finance-proposals_en 
3 https://www.ecb.europa.eu/pub/pdf/other/ecb.eurosystemretailpaymentsstrategy~5a74eb9ac1.en.pdf
4 https://www.ecb.europa.eu/press/pr/date/2021/html/ecb.pr210714~d99198ea23.en.html 

A survey5 by the Bank for International Settlements in 2021 found that 86% of central banks surveyed were actively 
researching the potential for central bank digital currencies (CBDCs), 60% were experimenting with the technology 
and 14% were deploying pilot projects. 

Problem the initiative aims to tackle 

The introduction of a digital euro aims to preserve the role of public money in a digital economy to tackle the 
following challenges and scenarios: 

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In the digitalising EU economy, citizens and businesses may significantly reduce their use of cash
for daily payments to a point where it could weaken confidence in the euro as the single currency.
For now, cash remains the dominant means of payment in terms of number of retail transactions (about 70%
in 20196),  while  it  accounts  for less than 50% of  retail  transactions in  value terms. It is currently the only
payment means with legal tender status. The Commission is committed to maintaining EU citizens’ access
to  euro  cash.  However,  as  the  digital  economy  becomes  more  and  more  dominant,  the  role  of  digital
payments  will  continue  to  grow  while  cash’s  availability,  acceptance  and  use  for  payments  may  decline,
which  may  erode  confidence  in  both  the  currency  and  the  financial  system.  Furthermore,  an  excessive
decline in the availability and use of central bank money  in favour of private means of payments such as
commercial bank money poses risks to financial inclusion. In addition, a cyber-incident, natural disaster or
other extreme event could hinder the provision of certain digital private payment services, which could cause
large economic disruption in a digitalised economy if cash is marginal.

The digitalisation of the economy and evolving user expectations require digital and innovative state
of  the  art  means  of  payment  that  meet  a  wide  array  of  end-users’  needs.  EU  businesses  also
increasingly  require  innovative  payments  to  support  their  logistics,  energy,  internet  of  things,  rental,
streaming and other online services and businesses in the new Industry 4.0 era. While solutions offered by
the private sector, including newly emerging business models such as stablecoins, could address some of
those  needs, innovative payment solutions in central  bank money  could support and  complement private
payment  solutions,  in  particular  with  regard  to  the  offering  of  pan-European,  instant  –based  payment
solutions.

Increasing  challenges  to  the  EU’s  open  strategic  autonomy  and  the  need  to  strengthen  the
international role of the euro. Benefiting from large barriers to entry due to network effects, international
card  schemes  and  other  large  technology  companies  have  very  strong  positions  in  the  EU’s  payment
markets.  Furthermore,  over  the  medium  to  long  term,  new  alternative  payment  means  (crypto
assets/stablecoins, foreign central bank digital currencies (CBDCs) might carve out a share in the EU’s retail
payment market. Both developments increase the risk of external disruption and may increase the volume
of  non-euro  denominated  payments.  This  would  mean  a  challenge  to  the  use  of  the  euro  as  the  single
currency within the euro area and furthermore decrease the domestic and international role of the euro as
an invoicing currency7.

Basis for EU action (legal basis and subsidiarity check) 

Under Article 3(1)(c) TFEU, the EU has exclusive competence in the area of monetary policy for the Member States 
whose currency is the euro. Issuing a digital euro and deciding on its technical features falls within the ECB remit but 
requires its prior creation by an EU Regulation setting out its essential elements. A new form of central bank money 
available  to  the  general  public,  alongside  the  euro  banknotes,  issued  by  the  Eurosystem,  must  be  created  and 
regulated in its essential aspects by an EU Regulation based on Article 133 of the TFEU. That article provides for 
the laying down of ‘measures necessary to the use of the euro as the single currency’. This was emphasised by the 
Council recommendation of January 2022 on the economic policy of the euro area for 2022. 

In the  euro area, euro banknotes and coins are so far the only  legal tender pursuant, respectively, to Article 128 
TFEU and Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro. Legal tender status for 
the  digital  euro  would  be  an  essential  characteristic  to  be  included  in  the  Regulation  based  on  Article  133  of  the 
TFEU. 

5

https://www.bis.org/about/bisih/topics/cbdc.htm#:~:text=A%202021%20BIS%20survey%20of%20central%20banks%20f
ound,digital%20currency%20%28CBDC%29%20would%20be%20a%20digital%20banknote. 

6 Source: SPACE survey by ECB. Study on the payment attitudes of consumers in the euro area (SPACE) (europa.eu) 
7 https://www.ecb.europa.eu/pub/ire/html/ecb.ire202106~a058f84c61.en.html 

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Moreover, additional amendments of the current EU legislative framework may be needed to adjust to the digital euro 
and digital currencies issued by central banks of non-euro area Member States. 

Legal basis

Article 133 of the TFEU (ordinary legislative procedure with consultation of the ECB) 

B. Objectives and policy options

A digital  euro  would be  an electronic form of central  bank money accessible for citizens and firms.  A digital euro 
should support the following objectives: 

First, it should ensure a continuous supply of central bank money, in digital form, given the declining use of cash as 
a  means  of  payment.  Preserving  the  accessibility  and  usability  of  central  bank  money  in  the  digital  era  is  key  to 
protecting monetary sovereignty (i.e. the ability of public authorities to control the unit of account in their jurisdiction 
in order to manage the macroeconomy) and the well-tested two-layer monetary system based on convertibility of 
regulated/supervised forms of money into central bank money. Central bank digital money would thus complement 
cash in providing a  monetary  anchor for the payments system  by  ensuring that  private money can always be 
converted into safe public money. It could also provide a monetary anchor in emerging payment segments where 
cash cannot easily perform its monetary anchor function. This would support confidence in the singleness of money 
and financial stability in the digital age. 

It should also support financial inclusion offering a complement to cash in an ever more important digital sphere as 
well as in a physical  world where  people and business choose cash less often. The digital euro  should not have 
undesirable effects on financial stability and financial intermediation: it should neither allow excessive conversion of 
banking deposits into digital euro, nor create an unlevel playing field with private payment service providers. 

Second, it should support the digitalization of the European economy and the development of state of the art, safe, 
efficient pan-European payments in central bank money with a high level of privacy and data protection. The digital 
euro can play a role in further enhancing competition and innovation in the European retail payments market and 
reducing its fragmentation as well as supporting digital financial services. It should be in full synergy with the rollout 
of instant payments in the EU, and the emergence of pan-EU payment solutions. Overall, the design of the digital 
euro should ensure a high level of synergy with private initiatives e.g. when it comes to distribution, acceptance and 
use.  

Third, it should support Europe’s open strategic autonomy and strengthen the international role of the euro. 

At  this  preliminary  stage  of  reflection,  the  Commission  will  explore  several  possible  policy  options  to  achieve  the 
general objectives pursued. A digital euro could be used in several payment situations including person to person, 
person  to  business  (point  of  sale,  e-commerce),  person  to  government  and  machine  to  machine  payments.  The 
digital euro may also offer state of the art payment functions such as programmable payments.  

The digital euro’s design choices may include: 

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account or bearer-based models (e.g. verification),
access to digital euro and usability (e.g. obligation for intermediaries to ensure the access to and usability of
digital euro for their clients),
identifying appropriate identity solutions including the possibility of using the European digital identity wallet8
offering the possibility of a common certified infrastructure including a secure and trustworthy solution for on-
boarding and for online and offline payments,
distribution (centralised, decentralised involving intermediaries),
financial inclusion (easy onboarding and use),
the payment solutions (online, offline, micro and programmable payments),
the store of value functions (potential limits or disincentives to mitigate risks to financial stability and impact
on the financial sector),
business model (fee structure for intermediaries), and
legal tender status (e.g. acceptance requirements for merchants providing digital payment services).

The  digital  euro  should  abide  by  anti-money  laundering  /  counter  terrorism  financing  rules  and  data  protection 
requirements set out in Union law. 

The Commission is considering whether granting legal tender status to the digital euro has implications for the legal 
tender of euro cash that would warrant the option of a binding EU legislative proposal defining the meaning of legal 

8 https://ec.europa.eu/commission/presscorner/detail/en/IP_21_2663 

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tender for euro cash, in line with CJEU case law, to ensure coherence and safeguard the role of euro cash as a 
complement to the digital euro. In the absence of EU action, the only definition of legal tender in EU secondary law 
would concern the digital euro, which could point to a corresponding need to define the meaning of legal tender of 
euro cash (banknotes and coins) in EU legislation. Thus far, the key principles of the legal tender of euro cash have 
only been laid out in a Commission Recommendation from 20109 and in a recent court ruling10 of the European Court 
of Justice (CJEU). 

C. Likely impacts

The digital euro would have an impact on 

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EU residents and businesses within the euro area, who would be able to use central bank money both in
physical and in digital form and be able to use a full range of payments (e.g. in e-commerce, remote peer-
to-peer payments). In the case of digital forms of euro, there will be a substantive impact on the protection
of personal data. The functioning of digital euro will require processing of personal data, including sensitive
personal data, in full compliance  with the GDPR framework. Specific designs (e.g. easy  on-boarding and
use, offline peer-to-peer payments) of the digital euro could help vulnerable segments of the EU’s society
and thus support financial inclusion in the digitalising economy.



 Businesses, which could benefit from a wider range of digital payment solutions for the acceptance of digital
payments. Depending on the ultimate decisions on the design, the digital euro could offer a cost-competitive,
instant and state-of-the-art complementary, central bank money based payment solution (e.g. compatibility
with smart contracts).
Financial intermediaries (i.e. payment service providers, credit institutions), which could distribute the
digital euro and be able to develop additional innovative services on top. However, if deposits are converted
to digital euro at a larger scale, the intermediation role of some of these might be adversely impacted and
could lead to higher funding costs for credit institutions and their increased reliance on Eurosystem funding.
The design of the digital euro will thus seek to minimise the risk of large-scale conversion of deposits e.g. by
introducing limits or disincentives to using the digital euro as a store of value instrument.
Private payment services and initiatives, which would face competition in digital payments from the digital
euro that could potentially offer cheaper, instant payments without credit risk. While competition is desired,
a fair and viable business model for the digital euro may be needed to avoid squeezing-out and undesired
impacts on private payment services and innovations and to incentivise payment service providers to offer
the digital euro.
EU residents and businesses outside of the euro area e.g. potential users in non-euro area EU Member
States and neighbourhood countries, who could – under certain digital euro designs – benefit from credit-
risk-free payments. The risk of (partial) currency substitutions and  the impact on the monetary policy and
financial stability of non-euro area Member States could be mitigated by limitations on the use of the digital
euro outside the euro area.

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D. Better regulation instruments

Impact assessment 

An  impact  assessment  will  be  prepared  and  submitted  to  the  Regulatory  Scrutiny  Board.  Given  the  close 
entanglement of the legislative initiative with the ECB project, material from the ECB’s public consultation and impact 
studies should be used to avoid unnecessary duplication of tasks and make good use of public resources. 

The impact assessment will feed into the Commission’s proposal for a Regulation. 

Consultation strategy 

To support the impact assessment, a number of consultations will be used. 

9 Commission Recommendation 2010/191/EU of 22 March 2010 on the scope and effects of legal tender of euro banknotes and 

coins.  

10 Judgment of 26 January 2021 in joined cases Johannes Dietrich and Norbert Häring v Hessischer Rundfunk, (C‑422/19 and 

C‑423/19, ECLI:EU:C:2021:63). 

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Why we are consulting? 

The targeted consultation will gather further evidence on the following issues: 

1) Users’ needs and expectations for a digital euro

2) The digital euro’s role for the EU’s payment systems and the digital economy

3) Granting legal tender status to the digital euro while continuing to safeguard the legal tender status of euro cash

4) The digital euro’s impact on the financial sector and financial stability

5) Application of anti-money laundering and counter terrorist financing requirements

6) The data protection and privacy aspects of payments with a digital euro

7) Use of the digital euro outside the EU.

Target audience 

The targeted consultation aims to collect information from industry specialists, credit institutions,  payment service 
providers,  payment  infrastructure  providers,  developers  of  payment  solutions,  merchants,  merchant  associations, 
consumer associations, payment supervisors and other relevant authorities. 

11 https://www.ecb.europa.eu/paym/digital_euro/html/pubcon.en.html 

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