The European Central Bank’s Digital Euro Initiative
The European Central Bank (ECB) has intensified its efforts to introduce a digital euro, facing resistance from EU lawmakers concerned about privacy protections and the potential risks to commercial banks.
During a parliamentary economic committee meeting on Thursday, ECB board member Piero Cipollone stated that a digital euro “will ensure that all Europeans can pay at all times with a free, universally accepted digital means of payment, even in case of major disruptions.”
Some parliamentarians expressed worries that the digital currency may not adequately safeguard user privacy, and that providing accounts supported by the central bank could undermine the private banking sector.
Since 2023, legislation regarding the central bank digital currency (CBDC) has been under consideration in the European Parliament, encountering delays amid political concerns and the upcoming 2024 elections.
Cipollone mentioned that the foundation of the bloc’s digital payment systems is reliant on non-EU providers, which could impede the “capacity to act swiftly and independently — particularly in times of crisis.”
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He proposed the digital euro as a contingency plan in scenarios of cyberattacks or network failures, while also referencing US initiatives to promote dollar-backed stablecoins.
Cipollone noted that a digital euro would “complement physical cash, which remains key for resilience and inclusion.” However, he emphasized that digital payments are now “essential to daily life,” and it is the government’s responsibility to ensure their availability.
Concerns were raised by some lawmakers regarding the privacy aspects of a digital euro and the risk that EU citizens might prefer banking with the ECB over commercial banks, as the central bank could be seen as a more secure option.
Addressing privacy, Cipollone affirmed that the central bank “will not know anything about the payer and the payee,” adding that an offline solution for the digital currency “will be as good as cash in terms of preserving the privacy of the people.”
Pierre Pimpie of the right-wing Eurosceptic Patriots for Europe group expressed that “accounts in private banks could be emptied” due to the digital euro, criticizing the ECB’s authority to set a cap on user accounts, which he contended could be increased in times of crisis.
Cipollone responded that the central bank’s cap would be established “on the basis of rigorous analysis,” and noted that if corporations and affluent individuals “see a crisis in Europe, it will take them a second to buy a stablecoins denominated in a different currency.”
“The digital euro at that point would be the least of our problems,” he concluded.
Cipollone indicated that the ECB is operating under the expectation that digital euro legislation will be enacted by the second quarter of 2026.
To implement the digital euro, approval is required from three EU institutions: the parliament, the European Commission, and the European Council. The discussions among these entities may extend over several months.
Once the law is passed, potentially as late as mid-2026, the ECB will need to develop and test the infrastructure for the digital currency, a process that could span up to three years. This timeline suggests that a launch could occur around 2029, assuming there are no further delays.
