BABEL at the 28th EBI Policy Series on the Digital Euro
On 21 April 2026, the European Banking Institute (EBI) hosted the 28th edition of its EBI Policy Series, dedicated to "The Digital Euro: update on latest developments".
The recordings of the event have now been publicly released.
The panel was moderated by Dr. Thomas Gstaedtner, President of the EBI Supervisory Board, and brought together four voices mapping the state of play of the digital euro project across the institutional, industrial, academic and regulatory dimensions:
- Evelien Witlox, Director of the Digital Euro Project at the European Central Bank, who delivered the keynote.
- Christian Schäfer, Head of Payments at DSGV (Deutscher Sparkassen- und Giroverband).
- Prof. Dr. Christos Gortsos, President of the EBI Academic Board.
- Prof. Filippo Zatti, Università degli Studi di Firenze, EBI Academic Fellow and Coordinator of the BABEL research unit.
The intervention of Prof. Filippo Zatti
Prof. Zatti contributed to the panel as EBI Academic Fellow, bringing the legal and economic-law perspective developed within the BABEL research unit.
His intervention articulated three theses, built on his recent research on the legal status of central bank digital currencies and on the tokenization of money.
1. A multi-form monetary architecture
Prof. Zatti opened with a methodological premise: the digital transformation of money calls for a rethinking of the foundational categories of monetary law.
"The digital transformation of money requires us to revisit two foundational categories of monetary law: the legal tender status of the currency, and the finality of payments."
"What counts as legal tender, and when a payment is truly extinguished, look different when the support of money ceases to be a banknote and becomes an entry in a distributed infrastructure."
From this premise, he situated the digital euro in a broader monetary landscape. The landscape already includes tokenized commercial bank deposits, regulated stablecoins, asset-referenced tokens under MiCA, and tokenized securities.
The implication is that the digital euro should not be evaluated in isolation, but as one layer of a layered architecture.
"The digital euro is one component of a multi-form monetary architecture. It anchors that system without displacing its components."
From this premise, he drew a methodological consequence about how the project should be assessed.
"The scholarly question most worth asking today is not whether the digital euro is technically feasible. We know it is. The question is whether the equilibrium it creates between the public and the private, the central and the distributed, the retail and the wholesale, holds up under the test that comparative law and constitutional scrutiny impose."
2. The test of legal desirability
The second thread of his intervention introduced a category that Prof. Zatti has been developing in his recent work: the test of legal desirability.
It is a framework for evaluating whether the architectural design of a monetary instrument is internally coherent with the objectives it is meant to serve.
"In my research, I call this the test of legal desirability: the requirement that each objective of a monetary instrument be internally coherent with the architectural choices that are supposed to deliver it. The digital euro in its current design passes this test, but only in a narrow equilibrium."
That equilibrium, he argued, rests on three calibrations:
- The holding limits: they serve financial stability but constrain adoption.
- The privacy architecture: it protects rights under Article 8 of the Charter of Fundamental Rights, but depends on legislative permanence.
- The wholesale strategy: it works for tokenized finance, but raises questions of coherence between the retail and wholesale layers of the same public money.
"The coherence of the case is therefore real, but contingent. It depends on the legislator's willingness to hold the equilibrium."
"And to be honest with European citizens about the fact that these are not one argument in different variations, but arguments whose alignment is the product of careful policy design, not a natural convention."
3. Programmability in the system, not in the object
Responding to a question on the risk that the digital euro might crowd out private payment initiatives, Prof. Zatti reframed the alternative itself.
The dichotomy between "platform" and "crowd-out" is not a real choice between competing futures. It is a sequence of scenarios that depends on how the architecture is calibrated.
"I don't think that platform and crowd-out are alternatives. They are sequential scenarios of the same architecture."
Building on Article 24, paragraph 2 of the proposed Regulation, Prof. Zatti drew a structural inference about the legislator's choice.
That provision excludes that the digital euro itself can incorporate interest or conditions restricting its spendability. At the same time, it explicitly admits conditional payments managed by smart contracts external to the coin.
"The legislator has placed programmability in the system, not in the object. The ECB retains monetary sovereignty over the unit of account, and leaves the programmable economy of money to private actors: tokenized deposits, e-money tokens under MiCA, regulated stablecoins."
Referring to the Eurosystem's wholesale projects Pontes and Appia, he closed by pointing to the architectural rationale behind the divergence between retail and wholesale infrastructures.
"The retail architecture is centralized by macro-prudential necessity. The wholesale architecture is distributed because that is where the innovation of programmable money is already happening."
"The divergence between the two is not a contradiction. It reflects a choice to keep retail public money under centralized governance while letting wholesale infrastructure evolve alongside private tokenized finance."
Background: Prof. Zatti's recent research
The contribution to the 28th EBI Policy Series builds on a body of recent work that the Coordinator of BABEL has dedicated to the digital euro and to the legal nature of central bank digital currencies.
The most relevant works include:
- F. Zatti and R.G. Barresi, The Digital Euro Package: From Legal Tender to Payment Services Providers, in C. Pastor Sempere (ed.), Governance and Control of Data and Digital Economy in the European Single Market, Springer, Law, Governance and Technology Series, vol. 71, 2025. Open access version: ssrn.com/abstract=4885757
- F. Zatti, "Legal tender" and (Central Bank) Digital Currency: An Economic Law Analysis, in F. Zatti and R.G. Barresi (eds.), Digital Assets and the Law. Fiat Money in the Era of Digital Currency, Routledge, 2024, ch. 12. Earlier version of the analysis published in Law and Financial Markets Review, vol. 16, no. 3, 2023, available at ssrn.com/abstract=4627076
- F. Zatti (ed.), The Tokenized Economy. Regulatory Challenges and Interdisciplinary Responses, Giappichelli, 2026. The volume collects the outcomes of the Italian National Research Programme on the tokenization of money, led at the Florence Research Unit by Prof. Zatti. Related working paper on tokenized bank deposits and MiCAR: ssrn.com/abstract=5787664
Watch the recording
The full recording of the 28th EBI Policy Series is available on the EBI YouTube channel and on LinkedIn.
Watch the recording on YouTube
BABEL — Blockchains and Artificial intelligence for Business, Economics and Law. A research unit of the Department of Economics and Management (DiSEI), University of Florence.