“Towards a central bank digital currency (CBDC) for the euro area: A primer on the European Commission’s proposal for a Regulation of the EU co-legislators “on the establishment of the digital euro”” by Christos Gortsos (National and Kapodistrian University of Athens; EUSFIL Jean Monnet Centre of Excellence) was published on 29 April 2024 in the EBI Working Paper Series No. 170.

The aim of this study is a systematic presentation and brief analysis of (the majority of) the provisions of the proposal for a Regulation of the European Parliament and of the Council “on the establishment of the digital euro”, which was submitted by the Commission on 28 June 2023 as part of its “Single Currency Package” (taking in particular into account its Explanatory Memorandum and most of its recitals). The key concerns raised and proposals for amendment made by the European Central Bank (ECB) in its related Opinion of 31 October 2023 are also discussed.

The study is structured in four sections:

Section A (“General overview”) briefly discusses on the global context and then discusses the initiatives undertaken by the ECB on the digital euro project and on the Commission’s legislative proposal of 28 June 2023 within the system of its legislative “Single Currency Package”. The following three Sections develop on the specific provisions of this proposed legislative act. In particular:

Section B (“Key aspects of the Commission’s proposal for a digital euro Regulation”) discusses those relating to its subject matter, the establishment and issuance of the digital euro, its legal tender status and its functionalities, as well as the applicable law and competent authorities.

In Section C (“Distribution of the digital euro”) the emphasis turns on the proposed provisions relating to the distribution of the digital euro within and (then) outside the euro area, cross-currency payments, and the modalities of distribution.

Finally, Section D (“Limits to the use of the digital euro as a store of value and as a means of payment”) focuses on the proposed provisions on the limits to first, the use of the digital euro as a store of value and second, the fees on digital euro payment services.

Read the entire paper here:  https://ssrn.com/abstract=4810776 or http://dx.doi.org/10.2139/ssrn.4810776.