The European Central Bank (ECB) views the introduction of the digital euro (CBDC) as a strategically necessary step to maintain control over monetary policy, ensure financial system stability, and preserve monetary sovereignty amid the digitalization of the economy.
Philip R. Lane, Member of the ECB’s Executive Board, delivered a keynote speech at the Economics Society conference at University College Cork, emphasizing that the digital euro is crucial for safeguarding the eurozone’s monetary sovereignty. In his view, as cash usage declines, stablecoins gain popularity, foreign payment platforms dominate, and geopolitical risks intensify, a central bank digital currency (CBDC) becomes a critical component of the resilience of the EU economic and monetary union.
Lane noted that introducing the digital euro would ensure public access to “information insensitive” forms of central bank money, essential for maintaining trust in bank deposits and financial stability. This is particularly relevant given the rapid growth of e-commerce, accounting for over 30% of non-regular payments in the eurozone in 2025, and the increasing use of mobile wallets, which is rapidly diminishing cash’s role as a payment method.
The ECB is particularly concerned about the rise of stablecoins denominated in euros and, especially, U.S. dollars, as well as the growing dominance of unregulated digital platforms with embedded payment systems. The widespread adoption of such financial instruments poses risks of losing control over the unit of account, weakening the transmission mechanism of monetary policy, and fragmenting financial infrastructure.
According to the ECB estimates, the digital euro will help:
- maintain the central bank’s role as the anchor of the monetary system amid declining cash usage;
- curb the expansion of dollar-denominated stablecoins in the EU market;
- counteract the growing market influence of foreign tech firms in the payments sector;
- enhance Europe’s strategic autonomy in times of geopolitical tension.
The digital euro is also seen as a solution to retail payment system fragmentation within the eurozone. Currently, 65% of card transactions in the euro area are processed by international payment systems Visa and Mastercard, while 13 countries completely lost their national card networks. Meanwhile, more than 10% of retail transactions are conducted via mobile apps, the vast majority of which are foreign-owned.
As a legal tender, the digital euro would create a network effect, boosting competition and reducing transaction costs for businesses and consumers. However, the ECB still plans to impose limits on individual holdings of digital euros to mitigate the risk of liquidity outflows from commercial banks.
