In June 2023 the European Commission published its proposal for a Regulation on the establishment of the digital euro. The Commission’s proposal for an account-based digital retail currency reflects concerns about the Euro’s global competitiveness, but it is also designed to frustrate the increasing use of private crypto-currencies. In conferring the status of legal tender on the digital Euro, the Commission intends to promote innovation on retail markets and the digital finance sector by facilitating instant payments and interoperability between payment service providers. In commenting on the Commission’s proposal, the European Central Bank insists on maintaining the stability of the payment system without destabilising the traditional role of commercial banks. Both, the European Commission and the European Central emphasise that digital euro funds are a liability of the central bank. But when it comes to the payment infrastructure and the storage of the digital euro in accounts, users are relegated to private law contracting with a payment services provider or a traditional commercial bank. The seminar will address the private law framework for storing digital euros, paying debt, but also for using the new digital currency for investment purposes. This includes an assessment of the scope of duties owed by a payment services provider for offering an account (and hosting a digital wallet). Moreover, the legal status of the digital euro as an asset in insolvency and tracing scenarios will be explored, as well as the need for legislative action. The analysis will also highlight where data protection law calls for a recalibration of duties owed by payment service providers and banks.

About the Speaker:

Rainer Kulms is an affiliate of the Max Planck Institute of Comparative and International Private Law (U.S. law department), Lecturer-in-Law at Hamburg University, Germany, Fellow of the European Law Institute and Editor-in-Chief of the European Business Organization Law Review. He graduated from Hamburg University (Dr. iuris and Postgraduate Degree of Habilitation), obtained an LL.M. from the University of Michigan, Ann Arbor, and was Visiting Fellow at the University of Cambridge (Wolfson College). After several years in industry he has taught at the universities of Hamburg, Belgrade, Calcutta, Cluj, Jinan, Paris XI, Prague, Sarajevo, Taipei, Tirana, Timisoara and Xi’an and at the China University of Political Science and Law, Beijing, Hong Kong University, City University of Hong Kong and the China-EU School of Law. He has published books and various articles in his field of research (German, European and US Corporate and Commercial Laws, and the law and economics of related regulatory issues) and co-authored books on mediation law, US class actions and private law in Eastern Europe.

*CPD credits are available upon application and subject to accreditation by the Law Society of Hong Kong (currently pending).