The European Central Bank (ECB)’s intention to launch a digital euro by 2029 is hitting a wall of fierce reactions.
Before anyone else, fourteen major banks, including Deutsche Bank, BNP Paribas, and ING, expressed the gloomy view that the digital euro will undermine existing payment systems.
It is noteworthy that the above-mentioned banks have collaborated to create a pan-European private payment platform, Wero, which aims to compete with American giants such as Mastercard, Visa, and PayPal.
As they emphasize, the digital euro offers “limited added value for the consumer” compared to private solutions.
Furthermore, PwC undertook to assess the economic impact of the digital euro and concluded that its implementation will burden the financial sector with up to €30 billion.
The ECB disputed this estimate, calculating the cost at approximately €6 billion, but PwC’s analysis highlights the significant economic and technical challenge the project entails.
The digital euro has been under study by the ECB since 2020, while the Governing Council has set a pilot test for 2027 and a possible full rollout in 2029.
European legislative changes are required, as current regulations only allow the ECB to issue physical cash.
What the project’s supporters say
Supporters of the project, including members of the ECB Executive Board, cite the reduction in cash usage (from 72% to 52% within five years) and the dominance of American payment systems as reasons for the need for a digital solution to ensure European autonomy and security.
The rise of American stablecoins is also seen as a threat to the role of the euro.
Meanwhile, a report by MEP Fernando Navarrete proposes limited use of the digital euro, only as a replacement for cash for offline payments, so as not to create a parallel online system that would hinder the development of private European solutions.
He argues that the digital version should be activated only if private solutions competing with American providers fail.
A senior ECB official noted that even if a strong private European competitor to Visa and Mastercard is created, long-term stability is not guaranteed, since ownership of such systems can change, as occurred in the past with Visa Europe.
Financial freedom at risk
Beyond the above, the introduction of the digital euro is expected to bring about a deep long-term change in our financial system.
While the ECB speaks of efficiency and innovation, concerns are growing that anonymous payment will disappear and financial freedom will be restricted with the new digital currency.
Specifically, according to the central bank’s announcement, the digital euro will be available for citizens and businesses from 2029.
Initial pilot projects could begin as soon as 2027, provided the European legislator establishes the necessary legal framework by then.
ECB President Christine Lagarde stresses that the digital euro will complement cash – not replace it.
Nevertheless, in practice the new payment form could lead to the gradual retreat of physical money.
Officially, the project aims to make Europe less dependent on American payment companies such as PayPal, Mastercard, and Visa.
The ECB sees the digital euro as a “European answer” to the dominance of private providers in electronic payments.
In the future, consumers will be able to manage their money through a digital wallet directly at the ECB – an account that will allow transfers, purchases, and payments within seconds.
However, what appears technologically progressive carries political risk: with the introduction of central bank digital money, every transaction could theoretically be under the control of the ECB and competent authorities – transparent, traceable, and potentially regulated.
At the same time, public acceptance remains limited: according to surveys, the majority of citizens question the utility and security of the new digital currency.
Even the project’s cost has sparked criticism: by 2029, the ECB expects investments of around €1.3 billion, while annual operating expenses are estimated to reach €320 million – ultimately financed by the taxpayers of EU member states.
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