SUERF Policy Brief 612, June 2023. HTML, PDF.

Executive summary:

The ECB’s first two progress reports on the digital euro clarify the project teams’ considerations. Some motivations for a digital euro remain vague, some fundamental tradeoffs receive limited attention. Most importantly, the reports lack an analysis of why digital euro holdings as stores of value are not desirable and whether strategies to limit such holdings cause collateral damage. Against that backdrop some of the design choices backed by the Governing Council appear premature.