Cash, accounts, and central bank digital currencies: a legal view on the introduction of account- and token-based digital central bank money

The introduction of a new form of digital central bank money (Central Bank Digital Currency - CBDC) is actively discussed in the Eurozone. This paper explores different design features of retail CBDC and highlights terminological inconsistencies in the debate surrounding their legal status. It compares CBDC to incumbent forms of money and analyses central questions regarding their introduction from the perspective of European Union law, especially whether the ECB has to power to introduce CBDC and under which conditions CBDC would have legal tender status. For this appraisal, focus is especially put on the interpretation of the notions 'legal tender', 'banknotes', and 'coins' referred to in Art. 128 TFEU; the analysis is supported by experiences drawn from the legal discussion in the United States.