The Introduction of the Digital Euro from a German Perspective

Central banks around the world are exploring concepts of different forms of digital central bank money. They are proceeding with their investigations at different speeds and for different motives. While some central banks are only analysing the need for digital central bank money and its potential advantages and disadvantages for the time being, other central banks have already started developing the prototypes. Digital central bank money would be another form of money issued by a central bank and a direct liability of the central bank, in addition to cash and credit balances of licensed institutions at the central bank. Most central bank projects are aimed at digital central bank money that would be available to private households, companies and other non-banks. The Eurosystem is also currently discussing and examining the possible issuance of digital central bank money for the euro area—the digital euro. A digital euro would provide another payment method to choose from in the euro area. Therefore, a digital euro should be designed to meet the needs of the population. This raises a whole series of interesting questions, not least given the current investigation phase: How do private individuals currently assess a possible digital euro? What needs could it satisfy? Could it be designed as a kind of digital cash? Could it conceivably compete with traditional non-cash payment instruments? What factors could ultimately influence its acceptance and use by consumers? Against this background, this paper deals with what answers to the above questions are given in German society. In addition, a question was raised about the impact of the digital euro on Germany’s international trade.