The idea of introducing a digital euro is being discussed within the European Central Bank (ECB). The project aims to improve financial resilience, but it faces concerns about privacy and the potential negative impact on the banking system.
The Role of Digital Euro in Financial Resilience
The digital euro is seen as a crucial tool for ensuring financial resilience during crises. ECB board member Piero Cipollone argues that this instrument would ensure that transactions can still occur even during network failures or cyberattacks. The digital euro is designed as a free and universally accessible payment tool, intended to complement cash rather than replace it.
Conflicting Views Among Lawmakers
However, not all lawmakers support the idea of a digital euro. Some parliamentarians express concerns that moving deposits to ECB-backed wallets could shrink the funding base of commercial banks. Other concerns revolve around whether privacy will truly be preserved. Cipollone insists that the central bank would not have visibility into who sends or receives money, suggesting that an offline version of the currency could offer anonymity comparable to cash.
Political Hurdles on the Path to Digital Euro
Legislation for the digital euro has been on Brussels' agenda since 2023, but progress has stalled amid elections and broader political concerns. Any launch would require approval from three institutions — the European Parliament, the Commission, and the Council — a process expected to stretch into 2026. Only after that could the ECB begin building and testing the infrastructure, pushing a potential rollout toward 2029.
The digital euro concept sparks debates and remains a contentious topic within the EU. Supporters see it as a way to ensure Europe's financial independence, while opponents express concerns over centralization of power and banking system stability.
