As bronzed Eurocrats return from their August holidays and the corridors of Brussels fill once again with lobbyists, a surprising player has joined the fray this fall: the European Central Bank (ECB). Rather than being the target of lobbying, the ECB is doing the lobbying — pushing hard for the creation of a digital euro, a new form of electronic money that could redefine how Europeans pay for goods and services.
The debate over this ambitious project is now reaching its climax. EU governments hope to reach a political agreement by the end of the year, while the European Parliament prepares to take up the issue this autumn. Behind the technical jargon, however, lies a fierce political, economic, and even geopolitical battle over the future of money in Europe.
What Is the Digital Euro?
The digital euro is essentially a virtual extension of the euro — an electronic version of the coins and banknotes Europeans already use. Unlike existing digital payment methods, it would be issued directly by the European Central Bank, making it official legal tender just like physical cash. Each digital euro would be worth exactly one physical euro, backed by the full faith of the ECB.
This concept is part of a growing global trend toward central bank digital currencies (CBDCs) — government-backed digital money that can be used for payments without relying on private banks or credit card companies. The ECB began seriously exploring the idea in 2019, after Facebook (now Meta) attempted to launch its own virtual currency. That project, ultimately abandoned, served as a wake-up call for European regulators: if Big Tech could create private global money, central banks risked losing control of their monetary systems.
The ECB insists the digital euro would complement, not replace, cash. It envisions a system where citizens could use a smartphone “wallet” app to store and spend digital euros anywhere in the EU. Unlike today’s online banking money, these digital euros would be risk-free — guaranteed by the ECB, not a commercial bank.
How Is It Different From Today’s Digital Payments?
At first glance, the digital euro might seem unnecessary. After all, Europeans already make most of their purchases digitally — through credit cards, bank transfers, or apps like PayPal and Apple Pay. But there’s a crucial difference: those payments depend on intermediaries.
When you pay with a debit card, your bank doesn’t actually transfer your euros to the merchant. Instead, it makes a promise — settling accounts behind the scenes through complex systems run by private financial institutions and payment processors such as Visa and Mastercard. The money in your bank account is not sitting in a vault; it’s mostly lent out to others. Your “balance” is the bank’s promise to repay you, not a pile of euros waiting in your name.
The digital euro, by contrast, would be directly held with the ECB. One digital euro in your electronic wallet would be as real and final as a one-euro coin in your hand. Nobody could lose it, misuse it, or default on it. If your bank failed, your digital euros would remain untouched.
That makes the system revolutionary. Instead of going through banks or payment networks, people could transfer money peer to peer — from one wallet to another — instantly and securely, without Visa or a bank mediating the transaction. In essence, the ECB is trying to bring the convenience of digital payments together with the security of cash.
This could break the private sector’s monopoly over digital payments, challenging the dominance of U.S.-based firms and reshaping the European financial landscape.
Why Does the ECB Want It?
The ECB argues the digital euro is essential for Europe’s financial sovereignty. As cash usage declines and payments become increasingly digital, control over those systems has shifted to private — and mostly American — companies. Visa, Mastercard, and Apple Pay process a large share of Europe’s cross-border transactions. Meanwhile, tech giants like Meta and X (formerly Twitter) are exploring financial products that could further embed them in the payments space.
European officials fear this dependence could leave the continent vulnerable to foreign influence — particularly at a time when global politics are volatile. The return of Donald Trump to the White House has deepened these concerns. His administration’s aggressive trade policies and recent Genius Act, which boosts U.S.-based stablecoins (crypto tokens pegged to the dollar), have raised the specter of American digital money gaining ground globally.
Stablecoins — unlike volatile cryptocurrencies such as Bitcoin — are tied to fiat currencies and could become a practical medium for global payments. If dollar-linked stablecoins spread widely, they could undermine the euro’s role in international finance. The ECB sees the digital euro as Europe’s answer: a way to ensure that the euro remains relevant in the digital age.
The Political Battle in Brussels
Yet the digital euro faces steep political resistance — not least from banks and conservative lawmakers. Financial institutions worry that citizens might move their deposits from commercial banks to ECB digital wallets, starving banks of the funds they need to lend. To avoid such a bank run, EU governments are debating limits on how many digital euros one person can hold.
Others raise privacy concerns, fearing that a state-run digital currency could give governments access to detailed payment data. Countries like Germany and the Netherlands are insisting on strong protections, including anonymous offline payments. Belgium, for its part, has warned it will not support the digital euro unless it can function even without an internet connection.
Within the European Parliament, the man leading negotiations — Fernando Navarrete, a Spanish center-right lawmaker and former central banker — has emerged as one of the project’s fiercest skeptics. He has described the digital euro as “a last resort” and even “a nuclear threat,” warning that it could disrupt Europe’s banking system if introduced prematurely. Under his watch, Parliament’s approval of the project is far from guaranteed.
Meanwhile, the banking lobby is fighting hard to water down the proposal, arguing that the digital euro is a “solution looking for a problem.” They fear being forced to shoulder the cost of the new infrastructure without seeing any commercial benefit. Even some governments are reluctant, preferring to let the private sector handle innovation in payments.
What Happens Next?
The European Council, representing national governments, hopes to finalize its stance on the proposal by the end of this year. The European Parliament will then take up the matter, with major debates expected throughout the fall and winter. Final approval is unlikely before May 2026, with any real-world rollout expected no sooner than 2028.
In the meantime, the ECB is working overtime to convince skeptical politicians. In September, it launched a lobbying blitz — organizing seminars for members of the European Parliament, followed by appearances from Piero Cipollone, the ECB’s executive board member and chief advocate for the project. Central bankers will also promote the digital euro later this month at a high-profile meeting in Copenhagen.
Whether the campaign succeeds remains to be seen. But one thing is clear: the digital euro debate is not just about technology — it’s about who controls Europe’s money in the 21st century.
And in Brussels this fall, that’s a question with trillion-euro stakes.
