Despite persistent opposition, the European Central Bank (ECB) remains committed to pursuing the introduction of a digital euro, according to recent statements. Patrick Papsdorf, the ECB’s specialist for the digital euro, asserted in an interview with the Frankfurter Allgemeine Zeitung that significant political backing exists within EU institutions. Heads of state and government, the European Commission, the Council and numerous members of the European Parliament are reportedly supportive of the project, which the ECB maintains is intended to complement, not replace, physical cash.
Currently in a ‘project phase,’ following the preparatory stage concluded in November, the ECB aims to establish the necessary technical infrastructure for a potential launch in 2029. A pilot program, involving selected payment service providers and retailers, is slated to begin in 2027, contingent upon the passage of relevant regulation in Brussels early next year.
The initiative, however, faces considerable scrutiny, particularly from within the banking sector. Jörg Krämer, chief economist at Commerzbank, has publicly called for the project to be halted, arguing in the FAZ that the digital euro represents “a solution in search of a problem”. Krämer questioned the necessity of citizens holding additional accounts with the ECB, subject to limitations on deposit amounts (currently capped at approximately €2,000-3,000) and expressed concern that the significant costs associated with the project would ultimately be borne by banks and inevitably passed on to consumers.
The persistence of the ECB’s plan, despite these substantial reservations and potential economic ramifications, raises questions about the extent to which the institution is prioritizing political alignment over pragmatic and financially sound policy. Critics argue that the drive for a digital euro may be fueled more by a desire to maintain control over the payments landscape and compete with private digital currencies than by genuine consumer need or economic benefit. The regulatory framework now under consideration in Brussels will be a crucial testing ground, determining whether the digital euro will proceed as planned or become another example of overly ambitious, politically driven and ultimately unsustainable policy.