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Why Europe needs the digital euro

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8 Mins.

The digital euro is not just another digital payment method – it’s a public good that’s essential to European sovereignty, independence, and resilience.

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When Europe launched its Galileo satellite navigation system in the early 2000s, critics on both sides of the Atlantic questioned the investment. Why spend billions building a new system when the United States’ GPS already worked perfectly well and was free for everyone to use? The answer – and the reason the program thrives today – is autonomy.

In 2026, Europe faces a similar debate, this time around a completely different technology: the digital euro.

The digital euro is part of a global shift, with 91%1 of central banks surveyed by the BIS exploring central bank digital currencies (CBDCs) and recognizing the strategic importance of public digital payment infrastructure. However, as the European Central Bank (ECB) progresses with its plans for a 2027 pilot and full launch in 2029, there has been some discussion and debate. The banking sector naturally has its concerns, and some political voices also argue it’s a solution looking for a problem.

As Spotlight will explore in this article, this debate misses a fundamental point: introducing a digital euro has little to do with satisfying immediate consumer demand at first glance – and yet it’s about building a resilient infrastructure with digital public money for consumers.

Digital payments as a public good

To understand why the digital euro matters, it’s important to consider the changing role digital payments have undergone in recent decades. When digital payments were first introduced, they were seen as a convenient alternative to cash for a small, wealthy part of society. That is no longer the case. Digitalization changes the way we interact, work and shop. Today, in most countries, digital payment methods are just as common as cash payments. For this reason, they have crossed the threshold from novel payment option to essential infrastructure. This is a key distinction. 

When any innovation becomes truly socially relevant, it changes the rules for how it must be provisioned and governed. Universal accessibility becomes non-negotiable – it becomes a public good.

“Payment services are not a luxury, but are as essential to daily life as electricity or clean water,” Piero Cipollone, member of the ECB’s Executive Board, said last year. “When critical services are interrupted, citizens expect public authorities to ensure continuity.”

Cipollone’s parallel with electricity holds. When electricity was made universally accessible between the 1920s and 1950s, it revolutionized daily life, work, education, and health, playing an indispensable role in societal progress and economic development. But initially, this process was concentrated in urban areas for economic reasons – it wasn’t until much later that electricity spread to rural areas. Crucially, it was left to the state and municipal governments – as custodians of public goods – to ensure that was made possible, regardless of the cost. 

Digital payments now occupy similar territory. They have become essential to accessing the full promise of the digital world. This is why government intervention is necessary to fill the gaps where the private sector falls short of serving the broader public interest.

The digital euro provides this public infrastructure. Not to replace private solutions, but to establish the foundation they can build upon – and to ensure Europe controls the critical systems its economy depends on.

Contactless payment with a smartphone at a vegetable stall.

Why the digital euro matters

Here are five reasons why every citizen should be in favor of the new digital euro: 

  1. Protecting payment sovereignty

    Thirteen of twenty euro area countries (21 since January 2026) rely entirely on non-European digital payment solutions, like Visa and MasterCard, with no alternative, domestically owned schemes. More than two-thirds of card transactions in the euro area were settled through international payment schemes in the second half of 20232.

    Beyond the economic implications of all this money flowing out of Europe, there is a strategic vulnerability when it comes to sovereignty. By relying on payment infrastructure sitting outside Europe’s control, the region could be subject to geopolitical influences. Boardroom decisions made thousands of miles away may at times take precedence over European regulations, which could affect the continent’s ability to respond in challenging situations.

    The digital euro will establish sovereign infrastructure for digital payments – designed, governed, and controlled within Europe. Private solutions and foreign competition will continue to exist and thrive, but European citizens gain assurance that their ability to make digital payments can never be disrupted by forces or commercial decisions beyond their control.

  2. Building resilience

    Current digital payment systems share a common vulnerability: they all require constant connectivity to function. During emergencies – such as natural disasters, infrastructure failures, and coordinated attacks – ensuring payment continuity is critical to minimizing economic disruption and, more importantly, guaranteeing the safety and security of European citizens. 

    For example, if a region is cut off from the grid due to technical disruptions and families cannot access essential supplies because payment systems are down, their daily routines may be significantly impacted.

    The digital euro’s offline functionality addresses this structural weakness. It works just like a digital form of cash, transferred directly between parties without routing through central servers or requiring internet connections. This means network disruptions can never stop people from accessing essential goods, while businesses can continue to operate.

  3. Guaranteeing universal access and inclusion

    Although cash retains its importance in the modern era, we are seeing a reduction in access to cash: bank branches are closing in areas where transaction volumes don’t justify operational costs, and ATMs are disappearing from rural communities. At the same time, a significant portion of the European population still faces barriers accessing digital payments.

    One-fifth of eurozone residents lack either a card or a payment account,3 with rates climbing higher among lower-income groups. 

    As digital payments become necessary for full participation in modern economic and social life, how does Europe ensure no one is left behind? This is where private providers fail to serve everyone’s needs because they optimize for profitability, not accessibility or inclusion.

    Inclusion is a guiding principle for the digital euro4. First and foremost, the digital euro will be free for basic use. The digital euro app would comply with the European Accessibility Act,focusing on cognitive accessibility to ensure that it is easy for everyone to learn how to use.4 And in regions with poor connectivity, offline functionality will ensure everyone can still pay digitally.

  4. Protecting privacy as a public service

    Eighty-one percent of adults express concern about privacy violations regarding their financial data.5 Unfortunately, privacy isn’t always guaranteed with commercial payment systems. Everything from purchase histories to spending patterns and location data are all assets that can be monetized – especially given that most digital payment systems are based outside Europe and thus operate beyond the direct reach of EU regulations.

    The digital euro eliminates this trade-off. The ECB has no interest in monetizing user data. Instead, privacy is embedded into the infrastructure, ensuring full compliance with GDPR and EU data protection frameworks from the outset. The offline functionality enables citizens to make cash-like transactions without third-party tracking in a secure, regulated environment. People have the freedom to make digital payments at their discretion, just as they would with cash, without surrendering their privacy and exposing themselves to third-party risk.

  5. Enabling competition and payment innovation

    Europe’s payment market is dominated by a handful of international schemes, with each one operating proprietary systems. For European fintechs and banks, this makes it more difficult to enter the market.

    Without common standards, each new player must build proprietary systems from scratch or negotiate access to existing rails controlled by competitors. This leads to reduced competitive pressure on the dominant players, which in turn slows innovation because new entrants are discouraged from entering the market.

    The digital euro establishes public infrastructure with open, interoperable standards. Rather than competing for control of proprietary rails, all players can build on a common foundation. As a result, European fintechs and payment service providers can focus resources on innovation and improving the experience for customers, rather than rebuilding infrastructure or paying competitors for access. This creates conditions for sustainable competition and a more resilient payments ecosystem.

Smartphone displaying a glowing padlock icon for data security.

European values and interests

The digital euro is a necessary step for Europe’s payment ecosystem to remain sovereign, resilient, and inclusive in an increasingly digital and fragmented world. 

Critics question whether consumers are asking for the digital euro. They are asking the wrong question. Public infrastructure is not built to satisfy consumer demand – it’s built to enable society and the economy to function reliably for everyone, and to maintain strategic autonomy in an uncertain world.

Europe recognized the importance of owning strategic infrastructure. The digital euro represents a decisive step for digital payments: a move toward a homegrown public infrastructure that reflects European values and protects European interests.

Two men having a business meeting in a modern office at night.

Key takeaways

  • The digital euro is essential infrastructure – not a nice-to-have payment option – that will protect Europe’s sovereignty and independence in an era of geopolitical fragmentation.
  • Offline functionality ensures resilience – enabling payments to continue during network disruptions, natural disasters, or infrastructure failures when connectivity is unavailable.
  • The digital euro offers barrier-free digital payments for all European citizens in the eurozone.
  • It offers cash-like anonymity for offline transactions, with no risk of personal data being compromised or monetized.
     

  1. Advancing in tandem - results of the 2024 BIS survey on central bank digital currencies and crypto, BIS, Aug 2025

  2. The role of the digital euro in digital payments and finance, ECB, 2025

  3. Navarrete’s case against the digital euro misses the bigger picture, Positive Money, 2025

  4. FAQs on the digital euro

  5. Digital euro and privacy, ECB, accessed February 2026

  6. What consumers expect from the digital euro, BEUC, 2025

Published: 07/05/2026

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