Designing the Digital Euro: Law, Technology, and the Future of Public Money

In an age defined by digital transformation, money itself is undergoing reinvention. In Designing the Digital Euro. Privacy and Security through Blockchain Design, I give a comprehensive and legally grounded exploration      of what this reinvention could look like in Europe.

Rather than treating the digital euro as a purely technological project, the book positions it at the intersection of constitutional law, monetary theory, financial stability, and privacy engineering. Its central question is both technical and constitutional: How can the European Central Bank (ECB) design a digital euro that respects its mandate, safeguards fundamental rights, and remains technologically robust and secure?

The Digital Euro in Context: Motivation and Structure

The digital euro is to be the digital equivalent of cash. It will allow consumers to pay throughout the Eurozone and keep public money available. The book is structured to guide the reader from foundational questions to detailed design choices. It begins with explaining what central bank digital currencies (CBDCs) are, thus you don’t need to have a grounded understanding in CBDC to read the book.  The European Commission’s legislative proposal, expected to underpin issuance around 2026, forms the backbone of the analysis.

Consumers, under the current proposal, would access the digital euro through commercial payment service providers (PSPs). The digital euro would not bear interest, could be used offline, and would be withdrawable free of charge into cash or commercial bank deposits. In design, it closely mimics cash — but in digital form. Yet beneath this apparent simplicity lie profound legal and architectural challenges.

The book methodically unpacks these challenges chapter by chapter. It moves from motivations (Chapter 2) to the ECB’s constitutional status (Chapter 3), to fundamental rights (Chapter 5), to critics’ fears of social credit systems (Chapter 6), and then into increasingly technical terrain: blockchain-based privacy design (Chapters 7–10) and settlement mechanisms (Chapters 11–12).

This layered structure mirrors the complexity of the project itself: the digital euro cannot be understood without appreciating its legal, economic and practical foundations.

Central Bank Independence and the Limits of Legislative Power

One of the book’s most intellectually compelling contributions is its treatment of ECB independence. The legislative proposal effectively assigns the ECB the task of designing and executing the digital euro. But can secondary legislation impose such duties on an independent central bank?

Chapter 3 examines precisely this issue, analysing whether the digital euro falls within the ECB’s mandate under Articles 127 and 128 TFEU and the ESCB Statute. The argument that the digital euro could be treated as digital banknotes is legally plausible. Yet this raises accountability concerns: if the ECB acts under its primary mandate, judicial review remains limited; if bound by legislation, review may expand.

The analysis demonstrates that the digital euro is not simply a payment innovation — it is a constitutional experiment in monetary governance. The ECB’s independence, traditionally justified to shield price stability from political interference, must now coexist with legislative coordination. Thereby creating questions on who is liable if systems fail and cause damages.

This tension between independence and democratic legitimacy runs throughout the book, reminding readers that technological innovation does not occur in a constitutional vacuum.

Fundamental Rights: Accessibility and Privacy

If independence defines the institutional framework, fundamental rights define the normative boundaries. Chapter 5 addresses accessibility and privacy as core design constraints.

The legislative proposal assigns data controller roles to PSPs and the ECB/NCBs depending on function. This allocation attempts to reconcile blockchain-based systems with the GDPR’s concept of a “controller,” which traditionally assumes identifiable actors determining purposes and means of processing. The distributed nature of blockchain complicates this legal model.

The book argues persuasively that privacy must be embedded into the architecture itself. The blockchain design chapter recommends minimizing personal data stored on-chain and relying on encryption, with other data stored off-chain to support GDPR compliance and the right to rectification.

This architectural privacy-by-design approach is not abstract. It is grounded in concrete dilemmas. For example, enforcing holding limits and enabling emergency account switching may require a “single access point” (SAP) containing sensitive identifiers. Yet centralizing such data raises security and surveillance concerns.

These tensions cannot be simplistically dealt with. Instead, the book frames them as constitutional trade-offs that must be openly acknowledged.

The Fear of Social Credit

Public debates often conflate CBDCs with dystopian surveillance or social credit systems. Chapter 6 addresses this head-on.

Drawing on CJEU jurisprudence, the book argues that introducing a social credit mechanism would be unlawful under the ECB’s monetary policy mandate. Social credit focuses on socio-political goals, not price stability. While the ECB may support socio-economic objectives under its secondary mandate, these cannot conflict with primary objectives or open market principles. Social credit or programmable money would conflict with such objectives and in violation with other fundamental rights the ECB is obliged to respect.

This chapter performs an important clarificatory function. It separates legitimate design concerns from speculative fears, demonstrating that constitutional and treaty constraints significantly limit the ECB’s discretion.

For readers skeptical of digital currencies, this analysis offers reassurance grounded in legal doctrine rather than political rhetoric.

Blockchain as Privacy Infrastructure

Perhaps the most innovative contribution lies in the detailed exploration of blockchain as a privacy-enhancing infrastructure. The book adopts      Tan et al.’s micro–meso–macro framework to analyse design choices across infrastructure, governance, and accountability layers.

At the micro-level, the infrastructure decision between public and private blockchain networks is scrutinized. The book concludes that a permissioned private blockchain better aligns with privacy and governance needs, given that the Eurosystem environment is not “trustless” in the cryptocurrency sense.

At the macro-level, governance organization becomes central. The book evaluates centralized, semi-centralized, polycentric, and decentralized governance models. Given legal clarity requirements and data controller definitions under EU law, a centralized governance structure appears most compatible. This is not technological conservatism. Rather, it is constitutional realism: decentralization for its own sake may undermine accountability.

The blockchain structure allows the ECB to securely transfer accounts in case of emergency, verifying that the transfer is at request of the owner. This can be done without the ECB needing access to personal data of the account owner.

Settlement and the Transformation of Legal Tender

The later chapters examine blockchain-based settlement. The ECB’s current      TARGET2 system is technologically centralized, but nothing in law prevents a blockchain-based alternative.

Yet moving from an account-based to a token-based model raises profound legal questions about the nature of legal tender. If digital euros are tokens rather than claims, does their legal characterization change? The book argues that historical evolutions of legal tender suggest flexibility, provided the ECB retains exclusive control over issuance and validation.

Offline functionality introduces further complexity. Localized wallets could mimic cash storage, but risks such as malware and double spending must be mitigated. Sandboxing techniques may isolate the digital euro application, though they are not foolproof.

Device fingerprinting, proposed as a security measure, is critically assessed. While it may identify malicious devices, it poses invasive privacy risks and is not strictly necessary for AML compliance. The book argues for caution and proportionality.

Here again, the theme emerges: technological capability must remain subordinate to fundamental rights.

Artificial Intelligence and Emerging Liability

The analysis extends even to AI deployment. If AI-based systems are integrated into digital euro front-end services, deployer responsibilities under the AI Act must be clarified. PSPs will likely bear primary responsibility for onboarding, sanctions compliance, and AML-related AI functions.

This demonstrates the book’s scope: it anticipates regulatory intersections that many digital currency discussions overlook.

Why This Book Matters

At its core, Designing the Digital Euro asks a foundational question: Can Europe design digital money that enhances innovation without sacrificing constitutional values?

The answer is cautiously optimistic. Blockchain, if properly designed, can increase privacy safeguards. Governance structures can be aligned with legal accountability. Social credit fears are constrained by treaty law. Settlement innovation can coexist with legal tender doctrine.

But none of this is automatic.

The book’s greatest strength is its refusal to treat technology as destiny. Every design choice is filtered through constitutional principles, fundamental rights, and institutional mandates. It invites readers from a broad audience – lawyers, economists, technologists, policymakers – to recognize that digital currency is not merely a financial instrument but a public institution.

For scholars, the book provides a meticulous doctrinal and technical roadmap. For policymakers, it offers a structured framework for navigating complex trade-offs. For critical readers, it offers reassurance that democratic constraints remain operative.

And for anyone interested in the future of money, it delivers something rarer still: a vision of digital innovation grounded in the rule of law.

In a time when financial technology often outpaces legal reflection, this book restores balance. It demonstrates that the birth of the digital euro, if it comes, will not be the triumph of code over constitution — but the careful integration of both.

That is precisely why it deserves to be read.

The book is available open access (free) via this link: https://www.elgaronline.com/monobook-oa/book/9781035390649/9781035390649.xml

Front image: AI-generated image (Gemini).

Suggested citation:

Annelieke Mooij, ‘Designing the Digital Euro: Law, Technology, and the Future of Public Money’ (Comparative Digital Law Blog, 07 June 2026) <https://lawandtech.ie/designing-the-digital-euro-law-technology-and-the-future-of-public-money>.

About the author:

Annelieke Mooij is an Assistant Professor at Tilburg University. My current research focusses on regulating technological developments in the financial industry. Whereby I have examined the Digital Euro and currently explore financial systems such as those that will take place in the Metaverse. Whereby I examine the possibility of regulating technology by using technology.