Contrasting Views on CBDCs: Why a Digital Euro and Not a Digital Dollar?

Monetary authorities throughout the world are exploring the possibility of issuing a central bank digital currency (CBDC). The Federal Reserve and the European Central Bank have taken diverging routes at this junction, with the latter preparing a digital euro, while the Fed chair declared to be ‘nowhere near recommending’ a digital dollar even before it was explicitly prohibited by the White House Executive Order of January 23, 2025. Why has the option of a CBDC been met with increasing support in the Eurozone and growing skepticism in the United States? The paper addresses the question through a systematic comparison of the arguments for and against CBDC adoption that are given in the US and in Europe by their respective central banks, executive and legislative bodies. By analyzing and comparing official documents, we show that the main motivations are related with the structure of the payment industry and more specifically with the degree of control exercised by foreign companies: CBDC appears to be increasingly conceived by the ECB as an instrument to gain control over the domestic payment system, viewed as a strategic asset, and to strengthen monetary sovereignty.