Governing the digital euro ecosystem

As the digital euro project progresses from design stage to the implementation phase, the focus is shifting from fundamental principles to governance issues. Article 33 of the Digital Euro Regulation, currently under development, can be understood not just as a technical access rule but as a governance pivot between coordination at the scheme level and implementation by the markets.

A layered governance approach seems most appropriate. Coordinating interoperability requirements, security standards, certification processes and operational resilience makes sense at the scheme level, where consistent rules and standards are needed across the single market. However, wallet designs, customer interfaces, value added services and other implementations must be open to competition and innovation.

Accessing mobile-device functionality is the most sensitive issue. The final Regulation should establish a stand-alone Article 33 access regime, coordinated with the Digital Markets Act, that ensures effective and non-discriminatory access based on outcome criteria; it should also include measures that provide necessary and proportionate protection of system integrity.

The experience with the Single European Payments Area and Eurosystem TARGET services shows that the governance of an open, contestable and scalable digital euro ecosystem is best achieved through coordinated efforts, structured stakeholder participation and a predictable change management process.

Judith Arnal is Associate Senior Research Fellow at ECRI and CEPS. Apostolos Thomadakis is Head of Research at ECMI, and Senior Research Fellow and Head of the Financial Markets and Institutions Unit at CEPS. The study was originally published by CEPS.