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The European Central Bank (ECB) has continued to defend its digital euro plans, which are still not winning hearts and minds in the European payments industry.
“We are now witnessing a profound technological revolution that is reshaping economies worldwide,” said Philip Lane, an economist at the ECB, during a speech to students at University College Cork last week.
Lane’s speech is one in a long line of interventions from members of the executive board of the ECB trying to gather support for the digital euro project, which has so far divided rather than united stakeholders in the EU.
The debate over the Eurozone’s central bank digital currency (CBDC), the digital euro, has been a fixture in the payments space for half a decade now, with Christine Lagarde first making the ECB’s intentions known in October 2020.
This was when the ECB published a report examining the potential issuance of a digital euro by the Eurosystem.
Nine months later the ECB's Governing Council decided to launch the digital euro project.
Yet, in 2025, many questions remain unanswered, at least for the industry, and President Trump’s policies since taking office have shifted the debate.
Not only has he formally rejected the idea of a US CBDC, but he has made the US an increasingly unreliable ally for Europe.
In some ways, this has empowered the ECB, as the threats of trade wars and geopolitical tensions spurred by the new US administration have given it a new reason to spend so much on the digital euro.
This is something Lane pointed out, suggesting a European CBDC is a “promising solution” to counter dependency risks.
“It would provide a secure, universally-accepted digital payment option under European governance, reducing reliance on foreign providers,” he said.
“From a strategic perspective, the digital euro would curtail the risk that domestic-currency stablecoins might gain a significant market share in the domestic payments system, which would be highly disruptive for the banking system and credit intermediation.”
However, many in the market remain unconvinced. In fact, the only thing that they appear to believe is that a digital euro is coming, like it or not.
Consumers appear resoundingly indifferent to the issue. As covered by Vixio, a recent ECB study discovered that most consumers — almost 60 percent of a treatment group and 70 percent of a control group — were unlikely to use the digital euro, citing satisfaction with existing payment methods.
The ECB said that it sees potential in targeted, repeated communication but acknowledges strong consumer preference for current options, with adoption being challenging.
What is the use case?
"I've been hearing about the digital euro for seven years now,” said Marius Galdikas, CEO at Connect Pay.
Fundamentally, he explained, the problem is not providing services to consumers, but that these services need to be offered by someone who interacts with the customer.
“The digital euro would just be provided through licensed institutions. Does that make a fundamental change? These institutions will still have [know your customer] and compliance obligations, which is the biggest cost.”
“Does it impact me as the end consumer? What does it matter? Can I take it out and use it elsewhere in the world? No,” he said. “There’s a lot to unravel there. I’m a bit sceptical and unsure how to make it happen."
Galdikas pointed out that there needs to be a use case. “But, I don’t see one. Stablecoins? Yes, okay. This is a stablecoin issued by a central bank. Maybe you could just call it another stablecoin. Maybe it could be hugely influential for cross-border trading if it's wholesale. But for end users? I don’t see it."
Meanwhile, Lane suggested that the digital euro could be a way of controlling card fees — which could ultimately be a win for merchants, and is perhaps why they have been among the most enthusiastic supporters of the project.
“Having public access to central bank money serves as a disciplining mechanism, providing a reliable fallback option to using commercial bank money,” he said.
“In turn, the option of using central bank money for payments limits the scope for commercial payment systems to exploit monopoly power to charge excessive payment fees.”
As the share of online transactions increases, the extent to which the option to make payments in cash can act as a disciplinary tool against market power decreases, he suggested.
Substance over style
During a debate at the Merchant Payment Ecosystem conference, Eric Tak, the ECB’s product proposition chief for the digital euro, said that overall, the central bank is pursuing “robustness” over being the “fanciest, sexiest payment method out there”.
He defended the digital euro project, saying that there are areas where it is necessary, such as addressing friction in cross-border transactions in the EU.
Tak echoed Lane in noting the value of the euro as a monetary anchor for central bankers. “Though in all fairness, no 'zoomer' or merchant really cares about that part.”
“What we do see is that in many cases, there are very few choices for payments,” he said, pointing out that often the only choices are Visa and Mastercard.
This lack of competition has meant costs are going up, he warned. “Having a choice would be a good one.”
He also noted the necessity of resilience for the EU, something that a digital euro could bolster.
Overall, he said that the ECB is looking for “broad adoption, but limited market share."
“We don’t aim to displace either cash or well functioning solutions that are out there, but we would like to have people use it regularly enough to be able to understand how it works in case of emergencies, and use it whenever they feel like it,” he said.
He even said that some countries where peer-to-peer transactions work well, like in the Netherlands with iDEAL, may not need it at all.
“There are other countries like Austria and Ireland where they have none of that, and it could play a role and gain some traction in the absence of private sector solutions.”
Tak also said that the digital euro could alleviate privacy concerns, and would have fewer privacy issues than wallets deployed by private companies.
However, Galdikas pointed out that such payments would not be able to dodge the sort of anti-money laundering (AML) requirements imposed on others.
