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On June 28, 2023, the European Commission published three proposals for regulations on the single currency:
These proposals were published even though there is a certain amount of skepticism among the public, notably because many clients probably think they are already "using a form of digital euro when paying with their bank card or cell phone" (F. Collomp and D. Guinot, L'euro numérique avance, le scepticisme persiste, Figaro, October 17, 2023). However, these proposals are to be understood, in a way, as being a response to threats coming from the tech world, and the digital euro is to be seen as "an opportunity for Europe to preserve its monetary sovereignty" (Collomp and Guinot, same).
The digital euro would not be a new currency, but a new form of the single currency. This is reflected in Article 3 of Proposal 369: "The digital euro is established as a digital form of the single currency". This approach is not without consequence however: quite naturally, this will mean that the European Central Bank and the national central banks will have the exclusive right to issue the digital form of the euro (Art. 4, § 2, Proposal 369).
The concept of legal tender was created for coins (metallic money) and banknotes (paper money). It does not apply to scriptural money, which is to be construed as credit claims vis-à-vis credit institutions, whereas metallic and fiduciary money are credit claims vis-à-vis the central bank.
For years, there was no legal definition of this concept, nor was it defined by European Union law. There was only a Commission Recommendation (Commission Recommendation of March 22, 2010 on the scope and effects of legal tender for euro banknotes and coins) emphasizing that legal tender of euro banknotes and coins should imply mandatory acceptance, acceptance at full face value and the power to discharge from payment obligations. It wasn't until January 26, 2021 that a CJEU ruling (CJEU, Grde Ch., January 26, 2021, joined cases C-422/19 and C-423/19, Hessischer Rundfunk) provided a definition of legal tender for euro banknotes and coins. It was then taken up by Proposals 364 and 369 of the Regulation of June 28, 2023.
According to Article 4 of Proposal 364, the following three rules define the legal tender status of cash (banknotes and coins): their mandatory acceptance, at their full face value and with the power to discharge from payment obligations. These terms are explained in Article 4. In particular, it states that the payee may not refuse euro banknotes and/or coins tendered in payment to satisfy a payment obligation.
This text is echoed in Article 7 of Proposal 369, which states that "the digital euro shall have legal tender status". In this Article, the legal tender status of the digital euro is defined in terms similar to those set forth in Article 4 of Proposal 364: the legal tender status of the digital euro shall entail its mandatory acceptance, at full face value, with the power to discharge from a payment obligation.
Euro banknotes and coins and the digital euro shall be convertible into each other at par (Art. 15, § 1, Proposal 364; Art. 12, § 1, Proposal 369). The digital euro shall also be convertible at par with scriptural money and electronic money denominated in euros (Art. 13, § 5, Proposal 369). The physical and digital forms of the single currency are of equal importance (Recital 6, Proposal 369). However, the acceptance of digital euro payments shall be independent of that of cash payments, each obeying its own rules (Art. 12, § 2, Proposal 369).
This approach does however raise a certain number of questions. In particular, will the concept be linked solely to the issuer of the currency (C. Kleiner, Monnaie et paiement : du mérite de l'innovation technologique au grand chambardement légistique, in Chronique de droit bancaire international 2023, Rev. Dr. Bancaire et financier septembre-octobre 2023, 3, spec. no. 21)? This would appear to be the case, since it applies to coins and banknotes as well as to the digital euro. Furthermore, will the concept of legal tender be adapted to digital currency? In other words, is it so protean that it could be adapted to any monetary medium (ibid)?
Clients will be able to have digital euro and non-digital euro payment accounts. These two types of accounts will coexist, it being specified that the opening of a digital euro payment account will not be conditional on the opening of a non-digital euro payment account (Art. 22, § 2, Proposal 369). That being said, it will be possible to link digital euro payment accounts to non-digital euro payment accounts (Art. 22, § 4, Proposal 369).
The aim of Proposal 369 is to make the digital euro accessible to all. Article 22, paragraph 1, of the Proposal attests to this, namely by stipulating that the digital euro must be easy to use.
The digital euro will be distributed by payment service providers incorporated in Member States whose currency is the euro (Art. 13 et seq., Proposal 369) and by those incorporated in Member States whose currency is not the euro (Proposal 368). The aim is for all EU PSPs to have the right to distribute digital euro payment services in the euro zone.
Nothing has yet been decided. In October 2023, the decision was made to launch the "preparatory phase" of the digital euro project. However, this launch "is not a decision on whether to issue a digital euro" (ECB, Eurosystem proceeds to next phase of digital euro project, Press release, October 18, 2023).
