CBDC—Central Bank Digital Currencies—use and regulation perspectives – Lina Chaoui

LL.M. in International Business Law – Panthéon-Assas Université International Singapore | Master’s Student in Droit des Affaires et Fiscalité – Université Internationale de Casablanca

Abstract

Central Bank Digital Currencies (CBDCs) disrupted and shifted the traditional legal frameworks of financial laws on an international level. The digital euro project within the European Union highlights the intricate balance between innovation, monetary sovereignty, and individual rights. Hence, exploring the legal challenges of the integration, for instance, financial stability, data protection, and institutional competencies, leads to a refined comprehension. Through the use of a doctrinal and comparative approach, the compatibility of CBDCs with EU legislation, such as the Payment Services Directive and the Anti-Money Laundering framework, drawing insights from international experiences, is dissected. The analysis defends the hybrid model, combining privacy-preserving mechanisms with proportionate regulatory control, and provides the most coherent path forward for the Union. Thus, for a sound digital euro, the ECB must have a comprehensive, harmonized legal framework that aligns financial regulation and data protection under one consistent policy vision.

Introduction

Central Bank Digital Currencies (CBDCs) have gained significant traction recently as governments and financial institutions explore the potential of state-issued and regulated digital currencies. CBDCs are state-backed digital alternatives to cash and traditional bank deposits, unlike cryptocurrencies, which operate on decentralized networks. Within the European Union (EU), discussions on the implementation of a digital euro have intensified due to the decline of cash transactions, the rise of private digital payment systems, and the growing need to reinforce monetary sovereignty in an increasingly digitalized global economy. The introduction of CBDC in the EU has raised fears in the sense that it would affect financial stability, change banks’ operations, and raise privacy concerns through increased government surveillance. On the other hand, advocates believe it will strongly ease payment transactions and strengthen the euro’s importance on an international scale. This paper examines the legal and regulatory challenges of CBDC adoption in the EU, focusing on privacy, monetary sovereignty, and financial stability. The key question is: How should EU law adapt to regulate a digital euro while ensuring compliance with financial regulations and consumer rights?

Part I – The Foundations and Global Dynamics of Central Bank Digital Currencies (CBDCs)

A – Concept and Rationale for a CBDC in the EU

Central Bank Digital Currencies (CBDCs) are digital representations of a nation’s official currency, issued and regulated by the central bank. Unlike traditional bank deposits or physical cash, CBDCs are direct liabilities of the central bank, offering a risk-free digital payment method. The European Central Bank (ECB) defines a CBDC as “a digital form of central bank money that is accessible to the general public and can complement cash and existing electronic payment systems” (ECB, 2022)^[1].

CBDCs can be categorized into wholesale and retail models, each serving distinct purposes. Wholesale CBDCs facilitate interbank settlements and large-scale financial transactions, improving cross-border payment efficiency by reducing counterparty risks and settlement delays (BIS, 2022)^[2]. Retail CBDCs, in contrast, are designed for public use, functioning as a digital alternative to cash. The ECB’s proposed digital euro falls under the retail category, ensuring direct accessibility for consumers and businesses while maintaining financial stability (ECB, 2023)^[3]. Additionally, the ECB aims to increase financial inclusion while reducing reliance on private providers. By opting for a retail CBDC, the ECB aims to increase financial inclusion, reduce reliance on private payment providers, and ensure continued public access to central bank money as cash usage declines.

A critical debate in CBDC development is whether central banks should adopt a centralized or decentralized technological model. Despite the advantages of blockchain technology, such as transparency and decentralization, central banks have reservations about fully adopting distributed ledger technology (DLT) due to concerns over scalability, regulatory compliance, and monetary policy control. The People’s Bank of China (PBOC) has opted for a centralized model for its digital yuan (e-CNY), prioritizing state oversight over transactions (Fan, 2022)^[4]. Similarly, the ECB is exploring hybrid models that combine elements of blockchain and traditional centralized databases to ensure regulatory oversight while optimizing efficiency (ECB, 2022)^[5].

A key driver behind the push for a digital euro is the declining use of cash across Europe. According to the ECB’s 2023 report, cash transactions have significantly decreased across the Eurozone, with digital payments becoming the dominant method for retail transactions. While this shift reflects technological advancement, it also poses risks to financial inclusion, particularly for elderly populations, rural communities, and individuals without access to banking services. Sweden’s e-Krona initiative illustrates how central banks are responding to the reduced circulation of physical currency by introducing a CBDC as an alternative state-backed payment method (Sveriges Riksbank, 2022)^[6]. The ECB’s goal is to ensure continued public access to central bank money while avoiding excessive reliance on private digital payment providers that may not prioritize financial stability and accessibility.

A digital euro could increase financial inclusion by providing a secure and widely accepted payment method for individuals who do not have access to traditional banking services. This is particularly relevant in rural areas, where banking infrastructure is limited, and for low-income communities that rely heavily on cash-based transactions. Furthermore, the implementation of a CBDC may improve cross-border transactions by lowering transaction costs and settlement times. The G20 Roadmap for Improving Cross-Border Payments outlines how CBDCs can simplify international payments and increase financial efficiency (BIS, 2021)^[7]. The ECB recognizes that a CBDC could serve as a public good, ensuring that all citizens have direct access to central bank money, even as physical cash circulation declines (ECB, 2023)^[8].

The ECB has also stated that a digital euro might play an important role in improving monetary policy transmission. A CBDC would enable policymakers to implement interest rate adjustments more effectively, eliminating interruptions caused by private banking intermediaries (ECB, 2022)^[9]. Furthermore, worries about the dominance of private payment providers such as Visa, Mastercard, and Big Tech companies have sparked debate about the necessity for a state-backed digital payment option (EU Commission, 2023)^[10].

As the EU explores a digital euro, it must also consider global competition in the CBDC space. China has taken the lead with its digital yuan (e-CNY), integrating it into domestic payment systems. For instance, WeChat Pay and Alipay are to reinforce state control over digital transactions (PBOC, 2023)^[11]. Focusing on its possible effect on financial stability and monetary policy transmission, the United States Federal Reserve is gently investigating a possible digital dollar (Federal Reserve, 2022)^[12]. While China prioritizes domestic surveillance and centralized control, and the US, which is concerned about financial system disruptions, the EU faces a unique challenge in developing a CBDC within a multi-state currency union. Unlike single-nation CBDCs, a digital euro must accommodate diverse economic policies, legal frameworks, and banking regulations across 20 Eurozone member states. To maintain the euro’s global role and reduce dependence on external financial systems, the ECB is accelerating its research and policy planning for a digital euro, which will require careful legal, economic, and technological considerations to ensure its successful implementation.

B – Legal and Regulatory Framework for a Digital Euro.

The European Central Bank (ECB) is pivotal in the development of a digital euro, as it is responsible for maintaining price stability, ensuring the smooth functioning of the payment system, and regulating monetary policy within the Eurozone. According to Article 127 of the Treaty on the Functioning of the European Union (TFEU), the ECB’s primary mandate is to maintain price stability while also supporting economic growth and financial stability. The introduction of a CBDC aligns with this mandate, as it could serve as a modern monetary tool to enhance monetary control, financial accessibility, and economic resilience in an increasingly digitalized financial sector.

Recognizing the transformative potential of a digital euro, the ECB launched an investigation phase in October 2021 to assess its feasibility, design considerations, and legal implications. This study sought to assess hazards, including financial stability issues, privacy obstacles, and effects on commercial banks, as well as ascertain how a digital euro may improve monetary policy transmission and payment efficiency. The Digital Euro (2023) Progress Report by the ECB emphasizes several important results that will influence its possible application. First, the digital euro should supplement, not replace, currency, ensuring financial access for all EU citizens. Second, it must be broadly recognized by merchants and consumers, integrating easily with existing digital payment methods. Finally, the digital euro must maintain high levels of security and privacy while adhering to EU financial standards (ECB, 2023)^[13]. Furthermore, the G7 Public Policy Principles for Retail CBDCs (2021) underline the importance of strong consumer protection, financial stability, and resilience to cyber threats, all of which the ECB is actively researching (G7, 2021)^[14].

To enable the smooth implementation of a digital euro, the European Commission and ECB are developing a comprehensive regulatory framework. In June 2023, the European Commission presented a Regulation on the Establishment of the Digital Euro, which outlined the criteria for its issue, circulation, and legal status. This plan includes several critical provisions. First, the digital euro would be granted legal tender status, which means it would be recognized as an official method of payment within the Eurozone, ensuring widespread acceptance. Furthermore, the digital euro should enable offline payment capabilities, allowing transactions to take place without requiring an internet connection, and ensuring accessibility in rural places. Finally, to avoid bank disintermediation, the ECB is considering limiting individual digital euro holdings (ECB, 2023)^[15].

Data privacy is among the most delicate problems regarding the digital euro. Unlike cash transactions, which provide total anonymity, a CBDC would naturally rely on digital record-keeping and raise questions regarding possible government overreach and widespread financial surveillance. While the ECB insists that a digital euro must comply with EU data privacy standards, critics argue that it could create new vulnerabilities in personal financial data protection. The General Data Protection Regulation (GDPR) (Regulation (EU) 2016/679) mandates strict privacy safeguards, requiring any CBDC implementation to follow its principles of data minimization, purpose limitation, and user control over personal data (GDPR, 2016)^[16]. To address these problems, the ECB has proposed a tier-based privacy solution. Offline transactions would provide cash-like privacy, with no transaction data held by intermediaries. Online transactions, on the other hand, would require identity verification to comply with AML and CTF requirements (ECB, 2022)^[17]. Furthermore, the Court of Justice of the European Union (CJEU) has decided in instances like Schrems II (C-311/18) that financial institutions must adhere to stringent data transfer laws, guaranteeing that the data of EU residents is secured under European jurisdiction (CJEU, 2020^[18]).

Aside from privacy concerns, the digital euro has a significant technical problem in guaranteeing interoperability with existing payment systems such as SEPA (Single Euro Payments Area), commercial banks, and fintech platforms. The ECB has proposed a public-private partnership model in which banks and payment service providers distribute digital euros while maintaining seamless connectivity with existing financial services (ECB, 2023)^[19]. To function properly, the digital euro must be interoperable with existing payment systems, like as Visa, MasterCard, and mobile wallets like Apple Pay and Google Pay. Furthermore, it must interact with cross-border payment frameworks, particularly the TARGET Instant Payment Settlement (TIPS) system. The ECB is also looking into programmability capabilities that will allow firms to automate transactions using smart contracts while remaining compliant with EU law (ECB, 2022)^[20].

The Treaty on the Functioning of the European Union (TFEU) establishes the legal basis for creating a digital euro. According to Article 128 TFEU, the ECB has the exclusive power to issue euro banknotes, which could extend to digital currency issuance. Moreover, Article 133 TFEU gives the EU authority to regulate all kinds of financial flows, therefore strengthening the legal framework for a digital euro. Legal academics debate, meanwhile, whether a CBDC calls for modifications to treaties. While the ECB claims that a digital euro is simply an extension of central bank money, some policymakers say that explicit legislation is needed to clarify its legal character and protect against excessive government control over financial activities (EU Commission, 2023)^[21].

Beyond its legal foundations, the digital euro could significantly impact the Eurozone’s financial stability. Bank disintermediation, where consumers relocate funds from commercial banks to the ECB, therefore lowering liquidity and credit availability, is a main issue. This change might affect the conventional banking paradigm, impair monetary transmission, and raise borrowing prices. To mitigate these risks, the ECB is considering tiered interest rates on digital euro deposits, discouraging its use as a long-term savings vehicle (ECB, 2023)^[22]. Additionally, caps on individual CBDC holdings may be imposed to prevent sudden bank runs, particularly during times of financial instability. A hybrid model, where commercial banks continue playing a role in CBDC distribution and account management, is also being explored to maintain financial sector stability (ECB, 2022)^[23].

Changes to important EU financial legislation might be required in light of the possible effects of a digital euro. To facilitate CBDC transactions, the European Commission has previously suggested examining several legal regimes. CBDC transactions could be incorporated into the EU payment ecosystem through an upgrade to the Payment Services Directive (PSD2) (Directive (EU) 2015/2366)^[24]. AML/CTF compliance in digital euro transactions may necessitate amendments to the Anti-Money Laundering Directive (AMLD6) (Directive (EU) 2018/1673)^[25]. Additionally, to take into consideration the effect that CBDCs have on bank reserves and liquidity, the Capital Requirements Regulation (CRR) (Regulation (EU) 575/2013)^[26] may need to be modified. In order to specify the rights, responsibilities, and limitations of CBDC users, financial institutions, and regulators, some legal experts also contend that a new digital currency law ought to be developed (EU Commission, 2023)^[27]. These proposed regulatory modifications, aimed at ensuring legal clarity and financial stability, would establish the necessary framework for a secure and efficient digital euro. Nevertheless, the effective introduction of a CBDC in the EU will call for constant legal adaptation, close interaction with foreign financial institutions, and careful balancing of innovation with systematic risk management.

Beyond regulatory concerns, the introduction of a digital euro raises contractual law implications, particularly in the enforcement of smart contracts and programmable payments. If the ECB implements programmability features (e.g., automated tax deductions, conditional payments), legal questions arise regarding the enforceability of digital contracts under EU commercial law. The Payment Services Directive (PSD2) (Directive (EU) 2015/2366)^[28] currently governs electronic payments and financial transactions, but it does not explicitly cover CBDC-related smart contracts. Should the ECB introduce programmable payments, EU lawmakers may need to amend PSD2 or draft a new digital currency regulation to clarify liability, dispute resolution mechanisms, and contractual obligations for users and financial institutions.

Additionally, concerns exist regarding the legal status of CBDC holdings in the event of insolvency. If a commercial bank acts as an intermediary in digital euro distribution, would CBDC deposits be treated as customer assets or bank liabilities? Existing EU banking laws, including the Capital Requirements Regulation (CRR) (Regulation (EU) 575/2013)^[29], dictate capital adequacy requirements for financial institutions, but do not currently account for CBDCs as potential bank reserves. This uncertainty raises systemic legal risks, particularly if deposit insurance frameworks, such as the Deposit Guarantee Schemes Directive (DGSD) (Directive (EU) 2014/49)^[30], fail to clearly classify CBDCs as insured assets.

For instance, the Financial Action Task Force (FATF) mandates cross-border anti-money laundering compliance for digital payments, yet EU privacy laws under GDPR impose strict limitations on financial data collection and retention. If the EU implements a digital euro with programmability and traceability features, legal conflicts may arise between AML enforcement and GDPR compliance, requiring the European Commission and ECB to draft a unified regulatory framework.

Part II – Legal, Regulatory, and Policy Challenges of the Digital Euro

A – Comparisons with Global CBDC Initiatives

With its digital yuan (e-CNY) pilot program, China has led the way in CBDC invention. China’s e-CNY pilot program fits the government’s more general objectives of boosting digital financial inclusion and lowering dependency on US dollars in international trade. The digital yuan also serves as a tool for improving monetary policy control and tracking financial transactions. The People’s Bank of China (PBOC) has started testing in major cities to integrate the digital yuan with existing payment systems like WeChat Pay and Alipay (PBOC, 2023)^[31].

Sweden has chosen a more cautious and experimental approach with the e-Krona project, led by Sveriges Riksbank. Sweden provides an interesting case study as one of the world’s most cashless countries, with cash transactions accounting for less than 10% of total payments (Riksbank, 2023)^[32]. The e-Krona experiment not only tested different technological models but also emphasized user experience, ensuring that the e-Krona integrates seamlessly with Sweden’s advanced digital payment infrastructure, which is critical for its acceptance. Sweden’s e-Krona project highlights the value of a phased rollout and rigorous pilot testing before full-scale CBDC implementation. The ECB has taken a similar strategy during the digital euro research phase, identifying and minimizing risks before making a final decision (ECB, 2023)^[33].

In contrast to China and Sweden, the United States has taken a cautious and research-driven approach to CBDCs. Concerns from the commercial sector, as well as legislators, on the Federal Reserve’s involvement in producing a digital currency have greatly slowed down CBDC advancement in the political terrain of the United States. Complicating the matter even more is congressional discussion on regulatory policies and the necessity of fresh legislation. The Federal Reserve (Fed) published a discussion paper in 2022 describing the possible benefits and hazards of a digital dollar, but has not committed to releasing one. In the United States, key considerations include concerns about financial stability and the risk of bank disintermediation, a strong emphasis on private-sector involvement in CBDC issuance under central bank oversight, and ongoing regulatory uncertainty, with Congress debating whether a digital dollar would necessitate new legislation.

B – Future Prospects and Policy Recommendations

As the European Central Bank (ECB) gets closer to introducing a digital euro, various design decisions will impact its functioning, security, and adoption. The ECB has underlined three essential factors to consider: the decision between an account-based and token-based system, the necessity for offline payment capabilities, and the role of programmability via smart contracts. A key design decision for the digital euro is whether to adopt an account-based or token-based system. The choice between an account-based and token-based system will directly impact financial inclusion. While a token-based system, like cash, is theoretically simpler to use for those without access to financial services to participate in the digital economy, an account-based system guarantees regulatory control and compliance. In an account-based model, users would hold digital euro accounts with the ECB or commercial banks, ensuring regulatory oversight with transactions subject to identity verification in accordance with Know Your Customer (KYC), Anti-Money Laundering (AML), and Counter-Terrorism Financing (CTF) regulations (ECB, 2023)^[34]. Conversely, a token-based model would operate like digital cash, with ownership assured by cryptographic methods instead of identity-based validation. Although this would allow for anonymous transactions, it raises questions regarding possible money laundering (BIS, 2022)^[35]. But the absence of identification confirmation could be taken advantage of for illicit activity and money laundering, therefore compromising the financial integrity of the EU. Given the EU’s strong privacy restrictions under the General Data Protection Regulation (GDPR) and financial security requirements such as the AML Directive 6 (Directive (EU) 2018/1673)^[36], a token-only approach seems doubtful. Instead, the ECB is considering a hybrid system, where small-value transactions remain anonymous, but larger transactions require identity verification, balancing privacy concerns with regulatory oversight (ECB, 2023)^[37]. Furthermore, the ECB may employ advanced cryptographic techniques to validate transactions while still protecting privacy. These technologies would enable the validation of big transactions without disclosing private information, therefore guaranteeing regulatory compliance and safeguarding personal privacy.

The digital euro has to support offline transactions to guarantee accessibility, especially in places with poor internet connections. Offline functionality improves resilience to cyberattacks and network disruptions while preserving the cash-like usability of small transactions. The ECB has stated that Near-Field Communication (NFC) and Bluetooth-based offline payment systems are being tested (ECB, 2023)^[38]. Furthermore, combining the digital euro with existing digital wallets like Apple Pay, Google Pay, and SEPA quick payments will speed up acceptance. Programmability would enable automated payments via smart contracts, facilitating conditional transactions such as tax deductions and supply chain payments. This could include automated tax collection or targeted government transfers. While programmability improves efficiency, there are also worries about potential constraints on user autonomy. To address these concerns, the ECB has emphasized that programmability should not constrain how the digital euro is used, preserving its fungibility and widespread acceptance, just like traditional cash (ECB, 2023)^[39].

But the implementation of a digital euro compromises financial stability, especially for commercial banks. The likelihood of bank disintermediation, which is the process by which individuals move funds from commercial banks to ECB accounts, reduces banks’ capacity to grant loans and raises credit interest rates. The ECB might investigate a public-private cooperation approach whereby commercial banks operate as middlemen distributing the digital euro, therefore guaranteeing their ongoing participation in financial intermediation and addressing bank disintermediation. To counteract these dangers, the ECB is considering imposing holding limits to prevent large-scale deposit transfers, maybe capping individual holdings at €3,000 per person (ECB, 2023)^[40]. Furthermore, a tiered interest rate structure, with negative interest rates on excessive digital euro holdings, may discourage its usage as a store of value (BIS, 2022)^[41]. Another alternative is to implement a public-private partnership model, in which commercial banks would function as intermediaries in distributing the digital euro, preventing interruptions within current financial intermediation.

Aside from financial stability, the security of the digital euro is crucial, as a centralized digital currency may become a prominent target for cyberattacks, fraud, and data breaches. To protect itself against these risks, the EU must implement strong cybersecurity measures, such as strong encryption standards against developing threats (BIS, 2023)^[42]. The ECB has to give quantum-resistant encryption standards top priority as quantum computing technology develops, therefore guaranteeing the security of the digital euro against new hazards. This will call for frequent cryptographic protocol changes and continuous cooperation with cybersecurity specialists. To prevent illegal access, multi-factor authentication should be used. Additionally, frequent stress testing of the digital euro’s infrastructure would be required to uncover and address weaknesses before deployment. From a regulatory standpoint, compliance with GDPR, the Anti-Money Laundering Directive (AMLD6), and the Payment Services Directive 2 (PSD2) (Directive (EU) 2015/2366) will be critical in guaranteeing security and smooth interaction with commercial payment systems.

One significant advantage of the digital euro is its ability to improve cross-border payments by eliminating reliance on external financial infrastructure, such as SWIFT, which has been exposed to geopolitical threats, as evidenced by Russia’s SWIFT exclusion in 2022. Cross-border interoperability will also require harmonized regulatory frameworks to prevent financial fragmentation. The EU must engage with global financial authorities to ensure that the digital euro remains compatible with other CBDCs, such as the digital yuan and digital dollar, while adhering to anti-money laundering and terrorism financing regulations. The digital euro might reduce transaction fees, notably for international remittances, and increase the euro’s worldwide competitiveness versus the US dollar and China’s digital yuan (e-CNY). To reap these benefits, the ECB should work with the Bank for International Settlements (BIS) and other central banks to create interoperable CBDC standards (BIS, 2023)^[43]. Furthermore, integrating the digital euro with existing SEPA instant payment systems would ensure seamless cross-border usability.

A phased rollout is critical to mitigate economic disruptions and resolve technological challenges before full-scale deployment. Through the try-out period, the ECB must conduct research on user experience, their feedback, regarding their experience with technological challenges and regulatory issues. Ultimately, with this research, the ECB will be able to improve the digital euro’s design and overcome the challenges that the customers experienced before the hard launch. Between 2024 and 2026, the ECB should conduct pilot trials in select Eurozone countries, collaborating with major banks and fintech firms to refine security, offline functionality, and interoperability. This phase should prioritize offline payment capability, interoperability, and security testing. A phased public rollout between 2027 and 2029 might then broaden access to businesses and governmental institutions while closely monitoring the economic impact on bank lending and financial stability. The ECB can change regulatory measures based on pilot feedback before moving forward with full implementation in 2030. At this point, universal acceptability throughout the Eurozone, improved cross-border capabilities for international trade, and adaptive monetary policy instruments based on digital euro adoption rates would be top priorities. Pilot projects should test offline payments and security across countries with varying levels of digital adoption.

As the EU works to create a digital euro, rigorous planning and policy measures will be required to balance innovation and financial stability. The ECB has to decide on a hybrid approach that preserves privacy and interoperability while generating the least disturbance to the financial system. Adoption of the digital euro successfully will call for enhanced cybersecurity protections, international cooperation, and a slow rollout strategy.

The launch of a digital euro marks a watershed moment for the European Union’s financial system, balancing innovation with financial stability, privacy, and regulatory compliance. While the potential benefits are significant, the hazards of bank disintermediation, privacy concerns, and cybersecurity vulnerabilities rely on appropriate mitigation techniques.

Drawing on global CBDC initiatives, the EU must create a digital euro compatible with its unique multi-state monetary structure, ensuring widespread adoption across varied economies while maintaining financial stability. Its success will depend on a progressive rollout, interoperability with existing banking infrastructure, and compliance with GDPR and AMLD6 regulations. The ECB may create a CBDC that protects individual rights while maintaining the euro’s worldwide competitiveness by prioritizing privacy-enhancing technologies, encouraging collaboration with international financial institutions, and incorporating commercial banks into its distribution model.

As digital financing reshapes the global economy, the EU has a chance to establish legal and technological standards for CBDCs. A well-implemented digital euro will not only strengthen the EU’s monetary sovereignty but will also position Europe as a leader in financial innovation, ensuring a sustainable and inclusive digital economy in the future.

Bibliography

I. Academic Works (Books and Articles)

• Fan, X, ‘The Rise of CBDCs: State Control in Digital Payments’ (2022) 8(2) Journal of Financial Regulation 125.
• FinTech Europe, CBDCs and Financial Innovation: The Role of Fintech in Digital Currencies (FinTech Europe 2023).

II. Legal and Institutional Sources

A. Policy Statements and International Reports

• European Banking Federation, Position on the Digital Euro (EBF 2023).
• European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023).
• European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022).
• Financial Action Task Force (FATF), Anti-Money Laundering and CBDCs: Global Standards for Digital Payments (FATF 2023).
• G7 Finance Ministers and Central Bank Governors, Public Policy Principles for Retail CBDCs (2021).
• G20 Secretariat, Harmonizing International CBDC Regulations (2022).
• International Monetary Fund (IMF), CBDCs and Financial Stability Risks (IMF 2023).
• Sveriges Riksbank, Payments Report 2022 (2022) <https://www.riksbank.se/en-gb/payments–cash/payments-in-sweden/payments-report–2022/> accessed 9 October 2025.
• Sveriges Riksbank, ‘Payment habits of Swedish people’ (Statistical Data, 2023) <https://www.riksbank.se/en-gb/statistics/payment-patterns/> accessed 9 October 2025.

B. International Conventions

• United Nations Commission on International Trade Law (UNCITRAL), Model Law on Electronic Transferable Records (United Nations 2017).

C. State Legislation

• Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law (Sixth Anti-Money Laundering Directive) [2018] OJ L284/22.
• Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market (Payment Services Directive 2, PSD2) [2015] OJ L337/35.
• Directive (EU) 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (DGSD) [2014] OJ L173/149.
• European Commission, Regulation on the Establishment of the Digital Euro (EU Publications Office 2023).
• Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) [2016] OJ L119/1.
• Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (Capital Requirements Regulation, CRR) [2013] OJ L176/1.

D. Case Law

• Case C-311/18 Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (Schrems II) [2020] ECLI:EU:C:2020:559.

III. Other Relevant Documentation

• Bank for International Settlements, CBDCs: Opportunities, Risks, and Design Considerations (2022) <https://www.bis.org/publ/othp44.htm> accessed 14 May 2025.
• Bank for International Settlements, mBridge Project and CBDC Interoperability (2023) <https://www.bis.org/about/bisih/topics/cbdc/mbridge.htm> accessed 14 May 2025.
• European Central Bank, Progress Report on the Digital Euro (ECB 2023) <https://www.ecb.europa.eu> accessed 14 May 2025.
• European Commission, Proposal for a Regulation on the Establishment of the Digital Euro (2023) <https://ec.europa.eu> accessed 14 May 2025.
• Organisation for Economic Co-operation and Development (OECD), Global Outlook on Digital Payments and CBDCs (OECD 2023).
• The Federal Reserve, Money and Payments: The U.S. Dollar in the Age of Digital Transformation (January 2022) <https://www.federalreserve.gov/publications/files/money-and-payments-discussion-paper.pdf> accessed 9 October 2025.
• People’s Bank of China (PBOC), Progress in Research and Development of E-CNY (2023) <http://www.pbc.gov.cn/en/3307563/3307577/2023072517173167123.pdf> accessed 9 October 2025.

1. European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022). ↑

2. Bank for International Settlements, CBDCs: Opportunities, Risks, and Design Considerations (2022) https://www.bis.org/publ/othp44.htm accessed 14 May 2025. ↑

3. European Central Bank, Progress Report on the Digital Euro (ECB 2023) https://www.ecb.europa.eu accessed 14 May 2025. ↑

4. X Fan, ‘The Rise of CBDCs: State Control in Digital Payments’ (2022) 8(2) Journal of Financial Regulation 125. ↑

5. European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022). ↑

6. Sveriges Riksbank, The E-Krona Project: Progress and Future Steps (2022) ↑

7. Financial Stability Board (FSB), G20 Roadmap for enhancing cross-border payments: First consolidated progress report (13 October 2021). ↑

8. European Central Bank, Progress Report on the Digital Euro (ECB 2023) https://www.ecb.europa.eu accessed 14 May 2025. ↑

9. European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022). ↑

10. European Commission, Regulation on the Establishment of the Digital Euro (EU Publications Office 2023) ↑

11. People’s Bank of China, Payment System Report (2023) (PBOC 2024) http://www.pbc.gov.cn/en/3688110/3688172/5188125/5327700/2024041216580199504.pdf accessed 9 October 2025. ↑

12. Federal Reserve Board, Money and Payments: The U.S. Dollar in the Age of Digital Transformation (Federal Reserve Board 2022) https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf accessed 9 October 2025. ↑

13. European Central Bank, Progress Report on the Digital Euro (ECB 2023) https://www.ecb.europa.eu accessed 14 May 2025. ↑

14. G7, Public Policy Principles for Retail Central Bank Digital Currencies (CBDCs) (HM Treasury 2021) https://assets.publishing.service.gov.uk/media/616754e1d3bf7f55fa9269d8/G7_Public_Policy_Principles_for_Retail_CBDC_FINAL.pdf accessed 9 October 2025. ↑

15. European Central Bank, Progress Report on the Digital Euro (ECB 2023) https://www.ecb.europa.eu accessed 14 May 2025. ↑

16. Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data (General Data Protection Regulation) [2016] OJ L119/1. ↑

17. European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022). ↑

18. Case C-311/18 Data Protection Commissioner v Facebook Ireland Ltd and Maximillian Schrems (Schrems II) [2020] ECLI:EU:C:2020:559. ↑

19. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

20. European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022). ↑

21. European Commission, Regulation on the Establishment of the Digital Euro (EU Publications Office 2023). ↑

22. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

23. European Central Bank, Digital Euro: Privacy and Financial Stability Considerations (ECB 2022). ↑

24. Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market [2015] OJ L 337/35. ↑

25. Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law (Sixth Anti-Money Laundering Directive) [2018] OJ L284/22. ↑

26. Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (Capital Requirements Regulation) [2013] OJ L 176/1. ↑

27. European Commission, Regulation on the Establishment of the Digital Euro (EU Publications Office 2023) ↑

28. Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on payment services in the internal market [2015] OJ L 337/35. ↑

29. Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (Capital Requirements Regulation) [2013] OJ L 176/1. ↑

30. Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (recast) [2014] OJ L 173/149. ↑

31. People’s Bank of China, Payment System Report (2023) (2024) <http://www.pbc.gov.cn/en/3688110/3688172/5188125/5327700/2024041216580199504.pdf> accessed 9 October 2025. ↑

32. Sveriges Riksbank, ‘Payment habits of Swedish people’ <https://www.riksbank.se/en-gb/statistics/payment-patterns/> accessed 9 October 2025. ↑

33. Sveriges Riksbank, ‘Payment habits of Swedish people’ <https://www.riksbank.se/en-gb/statistics/payment-patterns/> accessed 9 October 2025. ↑

34. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

35. Bank for International Settlements, CBDCs: Opportunities, Risks, and Design Considerations (2022) https://www.bis.org/publ/othp44.htm accessed 14 May 2025. ↑

36. Directive (EU) 2018/1673 of the European Parliament and of the Council of 23 October 2018 on combating money laundering by criminal law (Sixth Anti-Money Laundering Directive) [2018] OJ L284/22. ↑

37. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

38. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

39. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

40. European Central Bank, Digital Euro Investigation Phase Final Report (ECB 2023). ↑

41. Bank for International Settlements, CBDCs: Opportunities, Risks, and Design Considerations (2022) https://www.bis.org/publ/othp44.htm accessed 14 May 2025. ↑

42. Bank for International Settlements, mBridge Project and CBDC Interoperability (2023) https://www.bis.org/about/bisih/topics/cbdc/mbridge.htm accessed 14 May 2025. ↑

43. Bank for International Settlements, mBridge Project and CBDC Interoperability (2023) https://www.bis.org/about/bisih/topics/cbdc/mbridge.htm accessed 14 May 2025. ↑