The Digital Euro and the Role of DLT for Central Bank Digital Currencies

Jonas Gross
29 min readMay 13, 2020

Authors: Manuel Klein, Jonas Gross, Philipp Sandner

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Digitization has reached the monetary system. The advent of crypto assets, such as Bitcoin and Ether, revealed numerous advantages these digital assets based on distributed ledger technologies (DLTs) can bring: Using DLT can enhance the security of sensitive financial transaction data, increase transaction speed through faster processing and settlement and automate numerous business processes through smart contracts. These advantages ought to be realized in the conventional monetary system as well — not only in the “crypto industry”. DLT can be used both to digitally represent bank deposits and to tokenize central bank money via central bank digital currencies (CBDCs). Current DLT-based CBDC projects and prototypes among others by the Chinese and Swedish central banks, but also initiatives by the European Central Bank (ECB), show that DLT will be an essential pillar ofthe digitization of the monetary system in particular and the financial system in general in the future.(i)


The emergence of digital crypto assets, such as Bitcoin in 2008, and the underlying distributed ledger technology (DLT) have led central banks around the world to think intensively about the digitization of the monetary system and the introduction of central bank digital currencies (CBDCs). The Bank of England pioneered this movement and started to analyze the introduction of its own CBDC already in 2014. Over the last years, the topic has reached global scale — at the latest with the announcement by Facebook in the summer of 2019 to launch a digital DLT-based, global crypto asset “Libra” that will be backed by several fiat currencies and government bonds.

An in January 2020 published study by the Bank for International Settlements (BIS) shows that 70% of all global central banks are currently analyzing the issuance of their own digital central bank currency (see Boar, Holden, and Wadsworth, 2020). 10% of the participating central banks said that they are likely to introduce such digital currency in the short-run (up…

Jonas Gross

Jonas Gross is Chairman of the Digital Euro Association (DEA) and COO at etonec. Further, Jonas holds a PhD in Economics.