Who comes after us? The correct mindset for designing a Central Bank Digital Currency

In December 2021 the European Central Bank (ECB) published a report on "Central Bank Digital Currency: functional scope, pricing and controls" in its Occasional Paper Series [BPT21], detailing various challenges for the Digital Euro. While the authors peripherally acknowledge the existence of token-based payment systems, the notion that a Digital Euro will somehow require citizens to have some kind of central bank account is pervasive in the paper. We argue that an account-based design cannot meet the ECB’s stated design goals and that the ECB needs to fundamentally change its mindset when thinking about its role in the context of the Digital Euro if it wants the project to succeed. Along the same lines, the French National Council for Digitalization published a report on "Notes and Tokens, The New Competition of Currencies" [DGTV21]. Here, the authors make related incorrect claims about inevitable properties of Central Bank Digital Currencies (CBDCs), going as far as stating that a CBDC is not possible without an eID system. Our paper sets the record straight.