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Central bank efforts to balance inclusion, resilience and privacy come amid ongoing debates over sovereignty, system reliability and public trust, as the October deadline for a decision on the next steps approaches.
The ECB has at times struggled to convince MEPs of the value of the digital euro, and a public hearing on September 4, 2025 showed that legislators remain as divided as ever on the issue.
The split is largely between the left and right of the parliament. The former see the potential for the payment option to increase inclusion in the eurozone, whereas the latter are sceptical due to the potential impact on the EU’s banking sector should disintermediation become a problem. Right-leaning figures have also highlighted civil liberties issues such as privacy.
The ECB’s promotion of the digital euro is grounded in the geopolitical situation, with the conduct of the Trump administration in the US increasing momentum for sovereignty in multiple areas of the European economy.
“It is time to get down to it,” said the centre-left MEP Jonás Fernández, expressing disappointment that more progress has not been made in the two years since the European Commission unveiled its legislative proposal.
However, right-wing German MEP Siegbert Droese argued that the digital euro project risks replacing cash and enabling traceable payments.
Forging ahead
The political divisions do not seem to be hindering the ECB’s operational and technical work, and Cipollone has acknowledged that the central bank is “close to our tipping point”.
In his appearance, the central banker said that the ECB is working on the assumption that by Q2 2026 there will be legislation in place to account for the EU’s digital currency initiative.
The chair of the ECON Committee, Aurore Lalucq, who sits with the centre-left of the European Parliament, also took a sympathetic approach during her introduction, acknowledging that the subject “isn’t easy at times” and warning of “fake news” and “misinformation” surrounding the digital euro.
In his own introduction, Cipollone commented that “in an increasingly digital world exposed to new geopolitical and operational risks, we must protect the euro’s availability for all Europeans at all times.”
“Article 133 of the Treaty on the Functioning of the European Union reminds us of our shared responsibility to safeguard the integrity of our currency and take the measures that are necessary for its continued use.”
In his speech, he said that “payment services are not a luxury but are as essential to daily life as electricity or clean water. As a basic service, there must be a payment solution that is always available to all. This is especially critical in today’s world of rising geopolitical tensions and ever more sophisticated cyberattacks.”
He also noted incidents such as the sabotage of undersea cables in the Gulf of Finland and the Baltic Sea, as well as the power and network outages in Spain and Portugal during the spring of 2025.
“Such events show why safeguarding our system is vital.”
Issues of resilience and cost
In response to Cipollone, legislators on the right of the parliament raised a number of points.
Fernando Francisco Navarrete Rojas, an MEP representing Spain, focused on resilience in his queries to the central bank official.
“We have an overcomplicated project with different features, all of them are nice and the objectives are nice, but it can be extremely costly,” he warned.
He added that a compensation model could mean parts of the system are unable to recoup costs, especially considering caps on what merchants pay and the impact that this could have on payment service providers (PSPs).
“It is asking for a disaster to come,” he said.
However, Cipollone suggested that the project will not be loss-making and may even reduce scheme fees.
Meanwhile, French MEP Pierre Pimpie dismissed the “virtues” of the project.
“We have to remember that there is a risk that the accounts in private banks could be emptied as a result of this,” he said.
Pimpie, a member of the Patriots for Europe party, also criticised the idea of a ceiling on how much money could be held. He suggested that the ECB is being unclear and warned that MEPs risk “voting for a blank cheque and losing democratic control.”
However, in a sign of the political divide, Jussi Saramo, a left-leaning MEP, argued that “already five years ago”, the digital euro was justified.
Saramo added that President Trump provides another example of the “vital reasons” for citizens to have access to a digital euro.
Challenges ahead for the ECB
The ECB cannot eliminate criticism of the digital euro, and it seems that some parliamentarians are unlikely to change their minds on the issue.
Nevertheless, the central bank can seek to limit the impact of such criticism.
Much depends on demonstrating robust technical performance, particularly after the reputational damage caused by past payment system outages such as those affecting TARGET2.
Careful design choices, such as limits on holdings, offline functionality, free usage for consumers and distribution through banks, are intended to reassure both lawmakers and the public that the project will not undermine financial stability or erode privacy.
Politically, the ECB needs continued support from the European Parliament and Council, where opposition is strongest among right-leaning and sovereignty-focused factions. Although dissent will remain, effective communication and transparency could confine it to the political margins rather than the mainstream, meaning that a majority of MEPs and member state representatives in the Council lean in favour of the project.
At the same time, however, the digital euro carries a real risk of fuelling conspiracy theories.
Even strong privacy protections may not prevent critics from framing it as a step towards an Orwellian, cashless society, as has happened with the narrative in the US, where central bank digital currency (CBDC) work is now banned thanks to a Trump executive order.
Fears of government control over savings, forced adoption or the imposition of negative interest rates could also gain traction, particularly if compounded by future technical outages that raise doubts about the ECB’s competence.
The project may be compared unfavourably with China’s digital yuan, whereas pro-crypto advocates will likely present Bitcoin as a “freer” alternative.
More broadly, distrust in unelected EU institutions could provide fertile ground for narratives that portray the digital euro as an elite imposition, something that the Eurosceptic and populist elements of the European Parliament may seek to exploit.
These narratives are difficult to counter entirely, and the best the ECB can hope for is to frame the digital euro as a practical, consumer-friendly complement to cash, rather than a state-driven replacement.
How PSPs respond to the debate over the digital euro remains to be seen, but the project’s lack of clarity is likely to leave budgets uncertain. Boards may be unsure when and where to invest in products for customers linked to the digital euro, potentially affecting the CBDC’s success.
