Critical analysis of digital euro published

The Springer journal "Digital Finance" has recently published "The proposed design of the digital euro: A critical analysis" by Mikolai Gütschow and Bernd Lucke. They describe serious flaws in the digital euro design as proposed by the European Commission and propose GNU Taler as an alternative technology for a potential CBDC with tangible benefits for Europeans.

The text is available under open-access as DOI 10.1007/s42521-025-00171-2. The abstract reads as follows:

We analyse the Commission’s draft regulation for the establishment of the digital euro (DE). While well-intentioned, the design proposed by the Commission exhibits serious flaws. In particular, both the offline and the online versions of the DE show clear disadvantages compared with cash and online commercial bank money, respectively—for example, severe limitations on the store-of-value function of digital euros and strict holding limits unknown in current forms of money. There is essentially no discernible benefit to customers. Privacy remains comparable to current private payment systems, yet concerns persist about potential user re-identification at the central level. Competition, innovation, and trust are greatly undermined by the use of proprietary rather than open-source software. The enforcement of mandatory acceptance places competing means of payment at a disadvantage, even when technologically superior. The DE also distorts competition between banks and non-banks, as DE issuance and basic services are costly and unprofitable for banks. Banks may therefore resort to issuing a DE-based stablecoin that would be superior to the DE for both customers and banks, thereby undermining the ECB’s control over monetary policy. We show how these flaws can be addressed and outline an improved design for a European CBDC based on open software and elements of blockchain technology.

Digital Finance is a leading journal exploring cutting-edge research in digital financial technologies and their impact on the financial industry.