Recommendations

In this work, we question many of the design decisions of the digital euro in response to the official FAQ by the ECB. To summarize, we give a short list of recommendations for a successful digital version of the euro or any other CBDC:

• Acknowledge the impracticability of the offline version. The ECB should focus on the online version, make it a single, privacy-preserving digital euro system (KF1), instead of spending money and time on a design idea based on the unrealistic assumption of unbreakable hardware (KF2). The ECB should acknowledge the fact that a digital currency will never be as resilient as physical cash to extraordinary events like blackouts. Also, without the offline version, related questions of liability can safely be ignored (KF3).
• Provide a real advantage to users. The digital euro should provide a compelling, unique selling point to be successful (KF5), instead of merely adding another layer to the existing payment infrastructure under centralized ECB oversight (KF1). One such advantage could be cash-like payer anonymity for online transactions.
• Convince instead of enforce. If the digital euro provided a real advantage, it would not be necessary to put pressure on merchants to accept it with the associated additional costs (KF4). Thus, applicable legislative plans should be changed to make the acceptance of digital euros completely voluntary.
• Build on existing solutions and Free/Libre Software. Given that explicit design goals of the digital euro include user trust in the payment system, interoperability between participating payment service providers, and being a role model for CBDCs worldwide, the digital euro should be based on open designs and Free/Libre Open Source Software (FLOSS) instead of proprietary technology (KF6) and security by obscurity (KF2).

Overall, unless clear and uncontroversial benefits of the digital euro are established, we advise against the introduction of the digital euro as currently proposed.