Digital Euro: Frequently Asked Questions Revisited
Joe Cannataci, Benjamin Fehrensen, Mikolai G\"utschow, \"Ozg\"ur Kesim, Bernd Lucke

TL;DR
This paper critically examines the European Central Bank's digital euro FAQ, highlighting privacy, security, legal, economic, and procedural concerns, and questioning the feasibility and societal benefits of the proposed digital currency.
Contribution
It provides a detailed analysis of the ECB's digital euro design, revealing significant issues and gaps that challenge its privacy, security, and societal utility.
Findings
Central monitoring threatens privacy more than existing methods.
Offline anonymity is compromised by hardware security risks.
Legal liabilities and economic incentives remain unclear.
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…
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Taxonomy
TopicsBlockchain Technology Applications and Security · Digital Platforms and Economics · European Monetary and Fiscal Policies
