Can the Digital Euro be made attractive to all key stakeholders?

This paper explores the challenges and opportunities related to the adoption of central bank digital currencies (CBDCs), with a particular focus on the Digital Euro. It critically examines the motivations behind the introduction of the Digital Euro, addressing the often unclear problems it is intended to solve. The paper emphasises the necessity of motivating key stakeholders, especially commercial banks, consumers and merchants, to support and use the Digital Euro. It argues that simply mandating adoption is insufficient for success; instead, intrinsic motivation and clear business cases for each stakeholder group are essential. The paper also highlights the potential risks and unintended consequences of the Digital Euro, particularly its impact on commercial banks and the broader economy. Additionally, the paper proposes that an offline CBDC, resembling a modern form of cash, might offer a viable path forward, providing benefits such as increased financial inclusion and enhanced privacy. Ultimately, the reader can expect to gain insights into the complexities of CBDC adoption, the strategic considerations for different stakeholders and the potential models for making the Digital Euro a success.