Can CBDC Mimic Cash? A Deep Dive into the Digital Euro Case

Patrick Schueffel ()
Additional contact information
Patrick Schueffel: Department of Finance, HEG School of Management Fribourg, HES-SO, University of Applied Sciences and Arts Western Switzerland, Chemin du Musée 4, CH-1700 Fribourg, Switzerland

JRFM, 2025, vol. 18, issue 7, 1-35

Abstract: Central Bank Digital Currencies (CBDCs) are increasingly positioned as digital equivalents to physical cash, yet their ability to replicate the full functionality of cash remains contested. This study investigates whether the proposed Digital Euro can credibly serve as a substitute for physical Euro cash. Using a qualitative comparative framework, the analysis evaluates both currencies using 36 pairwise comparisons. The findings reveal that while the Digital Euro offers advantages in portability, divisibility, and digital integration, it falls short in key areas such as anonymity, fungibility, recognizability, and universal acceptability. These limitations are primarily due to technological dependencies, regulatory constraints, and the absence of physical tangibility. The study concludes that the Digital Euro cannot fully mimic the role of physical cash, particularly in offline and privacy-sensitive contexts. As a result, the hypothesis that the Digital Euro is an electronic equivalent of physical Euro cash is rejected. These findings underscore the continued relevance of physical currency and highlight the need for cautious, evidence-based CBDC design and implementation.

Keywords: central bank digital currency (CBDC); digital euro; currency; money; legal tender; quality (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/18/7/394/pdf (application/pdf)
https://www.mdpi.com/1911-8074/18/7/394/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jjrfmx:v:18:y:2025:i:7:p:394-:d:1703312

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().