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The German Banking Industry Committee (GBIC) has set out what it feels are essential requirements for the successful introduction of a digital euro.
In a statement outlining its position on the Eurozone’s central bank digital currency (CBDC) solution, the lobby group says: “The introduction of a digital euro will make Europe more independent, more competitive and more resilient.”
However, although it continues that “under certain conditions, a digital euro will strengthen the sovereignty and competitiveness of Europe in the payments market”, the statement goes on to warn that success is not guaranteed.
“This presupposes, in particular, that the digital euro offers real market value not only for users and merchants but also for payment service providers, and that it is widely accepted on the market.”
Central to the GBIC’s vision is close cooperation between public and private sectors to create a solution that balances innovation alongside practicality, and market acceptance.
The intervention comes as European Central Bank (ECB) board member Piero Cipollone has said that returning President Trump’s crypto push is only more incentive for a digital euro solution.
“Stablecoins, akin to money market funds, offer exposure to short-term rates in currencies like the dollar. In contrast, a digital euro would serve as an ECB-backed online wallet. It would allow payments even for non-bank customers, with capped, non-remunerated holdings,” he is reported to have told a conference in Frankfurt.
Private sector involvement
The GBIC, whose diverse membership ranges from established banks such as Commerzbank to fintechs such as Bitpanda, stresses the importance of a clear division of responsibilities.
It argues that the ECB should focus on issuing the digital euro as legal tender and managing the back-end infrastructure, while payment service providers (PSPs) should be tasked with handling customer-facing services and integration into existing payment systems.
Another priority is reducing complexity and costs, with the GBIC cautioning that the current design is viewed as unnecessarily complicated and resource-intensive, threatening to divert private sector investment away from other innovative projects.
“Strengthening European competitiveness is a matter of maintaining existing and proven European payments offers as well as promoting existing and new procedures such as SEPA, Bizum and EPI/wero, which will help pave the way for a digital euro,” the GBIC said.
“This would help avoid high implementation costs and allow the private sector to strengthen their innovation projects by the time the digital euro is launched on the market.”
The GBIC has also warned that the current design risks undermining this goal by imposing disproportionate costs on European banks, potentially hindering their competitiveness against non-European providers.
It believes equal treatment of payment services is essential, and emphasises that payments using the digital euro must comply with the same regulatory framework as other payment methods, to avoid distorting the market.
Market reach
The GBIC has said that to achieve broad market acceptance, the digital euro must deliver clear value to all stakeholders, including consumers, merchants and PSPs.
This includes high security standards, data protection and user-friendly features that enhance everyday financial interactions.
Equally important, according to the lobby group, is the need for fair remuneration mechanisms for banks, which will shoulder significant costs to implement and operate the digital euro.
It suggests that without appropriate compensation, financial institutions may struggle to sustain their support for the initiative.
The GBIC also highlights the need for transaction and holding limits to safeguard financial stability and protect consumers, stating that such limits would prevent excessive migration of deposits from banks to the digital euro, which could weaken bank liquidity and lending capacity.
Still only begrudgingly accepted
The GBIC’s intervention shows that the ECB and the European Commission have yet to truly win the hearts and minds of the Eurozone’s banking and payments industry.
Although it has not gone as far to suggest the EU follow the example of the US and cut the project entirely, the banking group, with its considerable set of EU stakeholders, has made it clear that it is unenthusiastic about the Eurozone’s vision.
Legal certainty is another fundamental pillar of the GBIC’s recommendations.
“The design of the digital euro must remain within the mandate of the EU legislator and, at the same time, respect the basic right to entrepreneurial freedom of market players,” the statement says.
“It is crucial that the legal framework conditions are clearly defined, particularly with regard to the application of national requirements (inter alia, property law) when transferring the digital euro and/or applying EU payment services legislation.”
The GBIC fears that the introduction of the digital euro could stifle innovation in the financial sector. In this it is in agreement with other lobby groups such as the European Payments Institutions Federation.
It argues that the significant costs and resources required for its implementation would divert attention from other innovation projects that are important for maintaining EU PSP competitiveness.
The GBIC is also concerned that unfair competition from the digital euro could limit the growth of private-sector payment solutions.
It points out that if the digital euro is favoured over existing systems, private providers may face reduced incentives to innovate, hindering the opportunity for advanced retail payment solutions to come about.
As the deadline for the ECB to make its decision on whether to progress with the digital euro project approaches, it feels to many that its continuation has already been confirmed.
It is clear, however, that the central bank still needs to target both outreach and legal clarity if it wants to get payment providers on board with its plans.
