European Central Bank officials pride themselves on championing democracy, but they seem to apply those values selectively. After submitting a public records request and conversing for weeks, the European Central Bank refused to provide information about its central bank digital currency (CBDC).
The request quickly turned sour. After explaining that I was interested in how much had been spent on developing their CBDC (the digital euro), I was asked for my papers. No, not my research on CBDCs. The central bank wanted me to provide identification to prove whether I’m a European citizen to ensure my request was in compliance with Article 2(1) of Decision ECB/2004/3 of the European Central Bank.
While I don’t typically share my address with strangers, I let the central bank know that I am not a European citizen and that my request should be considered under Article 2(2). Although Article 2(1) states that the European Central Bank must respond to requests from European citizens, Article 2(2) states that noncitizens can use the same process to obtain information.
Unfortunately, I soon learned that Article 2(2) means little in practice. The European Central Bank responded, saying, “Having examined your request, we concluded that, regrettably, at this juncture, it is not possible for the ECB to process it.” It later added that it “exercised its discretion not to process” my request because I am not a European citizen.
With that said, it seems citizenship doesn’t actually matter. I’ve been lucky enough to meet many allies in Europe. And one such ally, Maya Thomas from Big Brother Watch, was happy to help by making the request as a European citizen. Unfortunately, this request was also denied.
After extending the timeline to process the request, the European Central Bank decided not to share how much money has been spent on researching and developing its CBDC. The central bank argued that this information cannot be shared because it would (1) reveal the commercial interests of contractors and the central bank; (2) reveal the internal finances of the central bank; (3) reveal confidential information; and (4) reveal personal data.
In other words, revealing this information would make the European Central Bank accountable to the public. And, well, they can’t have that.
This rationale is, to be blunt, wholly absurd. If for no other reason, it is absurd because there are central banks that already share this information. Although it should provide more details, the Central Bank of The Bahamas documents its own CBDC development as a line item in its annual reports. Sure, their CBDC has largely been a failure, but that failure is not because of transparency.
What makes the European Central Bank’s justification even more absurd, however, is that officials have already shared some of these numbers in press announcements. A rough calculation suggests that at least €1.12 billion ($1.32 billion) has been allocated to the digital euro, and another €2.62 billion ($3.09 billion) would be spent in the launch year (Table 1). Yet, the true number is anyone’s guess. For example, one group estimated that costs could reach €18 billion ($21 billion).
Accountability is a fundamental piece of any functioning democracy. The public deserves to know how their money is being spent. That’s especially true given both the risks of CBDCs and the fact that the countries that are pushing the hardest for CBDCs are authoritarian.
Alas, the European Central Bank appears to see the issue differently. They’d rather control the flow of information than let the public see what’s happening for themselves.