A digital euro for everyone: Can the European System of Central Banks introduce general purpose CBDC as part of its economic mandate?

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This paper discusses the introduction of a general-purpose Central Bank Digital Currency (CBDC) by the European Central Bank (ECB) that is directly accessible to consumers through national central banks (NCB). This paper finds that it is not possible to introduce such a system under the ECB’s monetary mandate. The aim of direct access is to promote the socio-economic inclusion of the unbanked. This aim is not monetary but economic. Therefore such an introduction should be in accordance with the economic mandate of the ECB. This paper first analyses the legal foundation in “Legal foundation” section upon which CBDC can be introduced. It finds that it is possible to introduce CBDC based upon the ECB’s authority to issue legal tender. However, this would not provide a sufficient foundation to provide for direct access. Nor does article 17 of the ESCB Statutes provide the legal foundation for direct access. New legislation would have to be drafted for the ECB to introduce a CBDC system with direct consumer access. Even with this new legal foundation, the ECB would have to comply with its economic mandate. This article first analyses the extent of the economic mandate in “Framework” section. It then continues by discussing the aim of the economic mandate in “Aim” section. It finds that the socio-economic inclusion of unbanked is an aim consistent with the Treaties. The aim of general purpose CBDC, therefore, complies with the ECB’s economic mandate. The paper in “Efficient allocation of resources” section then discusses the criterion of efficient allocation of resources. It finds that the introduction of general purpose CBDC does not comply with this criterion. When introducing CBDC with direct access through NCBs the ECB is competing with commercial banks. This competition should be considered unfair based upon the ECB’s exclusive power to issue legal tender and the public status of NCBs. Since the issue of unbanked in the EU is limited and decreasing, there is not enough reason to consider offering a bank account as a Service of General Economic Interest. The introduction of directly accessible general purpose CBDC would therefore be unlawful.
Original languageEnglish
Number of pages16
JournalJournal of Banking Regulation
Publication statusE-pub ahead of print - 21 Jan 2022


  • ECB
  • European central bank
  • Digital Euro
  • Cryptocurrency
  • Virtual currency
  • Legal mandate
  • European Union Law
  • Banking regulation
  • Monetary Policy


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