Q14: How would the digital euro’s technical architecture work, and would it be based on distributed ledger technology such as blockchain?

The European Central Bank answers:

The digital euro would operate on a centralised settlement platform and the Eurosystem would record and verify all settlements and holdings. As direct liabilities of the Eurosystem, it is important that the digital euro in people’s wallets are safe in order to maintain trust, both in the euro and in the Eurosystem.

The digital euro is not based on distributed ledger technology (DLT), but it makes use of key design principles from DLT to enhance resilience and efficiency and to improve the system’s overall performance and reliability.

The digital euro’s resilient technical architecture would be built on established standards. A multi-region setup in which each region is equipped with multiple servers, going well beyond standard redundancy models, will ensure service continuity under all circumstances.

We answer them:

It is positive that the ECB finally acknowledged in the most recent revision of the FAQ that technology created to decentralize payments is not the best fit for a central bank. Until October 2025, it still stated that technical decisions were yet to be taken [1], although central settlement at the ECB was already part of the first proposal in 2020 [2].

Maybe it was politically difficult to simply reject DLT, after having hired blockchain experts [3], and while being subject to lobbying from cryptocurrency businesses [4].

  1. European Central Bank, FAQs on a digital euro. https://web.archive.org/web/20250721000819/https://www.ecb.europa.eu/euro/digital_euro/faqs/html/ecb.faq_digital_euro.en.html, 2025.
  2. European Central Bank, Report on a digital euro. https://www.ecb.europa.eu/pub/pdf/other/Report_on_a_digital_euro~4d7268b458.en.pdf, 2020.
  3. Ledger Insights, Ex-BNY mellon tokenization lead joins european central bank. https://www.ledgerinsights.com/ex-bny-mellon-tokenization-lead-joins-european-central-bank/, 2024.
  4. Digital Euro Association, Members. https://home.digital-euro-association.de/members, 2024.