In times of crisis of the multilateral system and geopolitical threatsEurope must pursue its strategic autonomy in all areas. In the financial sector, the almost total dependence on payment systems dominated by US companies (especially through Visa, Mastercard and PayPal) has become a severe risk.
It is a fact that Europe depends 72% on non-European networks for retail card payments.
The digital euro may be the key to making up for the lack of financial autonomy, but only if its design is taken care of and the defects that have hindered other digital currencies are avoided.
In principle, citizens could have a wallet and a savings account directly in public digital euros, issued by the ECB – which eliminates the risk associated with possible bank failures -, unlike the current private digital euros provided by commercial banks.
The money that we have in our checking accounts and that we consult through the websites of our banking entities are also entries of digital euros, but in that case, issued by the banking entities, since The European Central Bank only issues physical banknotes and coins.
There arises a first challenge: a public offer of digital euros through the ECB would represent an element of competition compared to the current digital solutions offered by private banks.substantially reducing the attractiveness of current savings methods, especially deposits.
In that sense, with a smaller basket of bank deposits, the capacity for money creation by banking entities would be greatly diminished, which would would have additional effects on the supply of credit and its price.
This aspect is crucial, since bank credit is for the economy the same as blood is for the human body. For this reason, the ECB is studying a holding limit for digital euros aligned with the use of cash in transactions and card payments.
A second challenge lies in the cost of the investment. The digital euro is an EU project, but banks have been developing instant payments for years – such as Bizum used in Spain, Italy and Greece, and the Wero system, which works in Belgium, Germany, France and Holland -, in which they have already invested millionaire resources that they have not yet monetized because shipments between individuals are free, although they hope to start obtaining income with its extension to businesses from 2026.
The implementation of the digital euro also requires making million-dollar investments for the development of the necessary infrastructure and equipment. -an estimated expenditure of 18 billion euros, according to a recent PwC report, which could rise to 30 billion considering more complex functionalities, such as offline payment (payments without mobile coverage and with higher levels of privacy); which implies for each entity they would have to assume 110 million euros, and also commit up to 46% of their human resources for four years).
The profitability of these operations can come when the digital euro is used as a means of payment through the commissions charged to businesses, as is now happening with credit cards. The ECB calculates that by purchasing with non-European debit cards (excluding credit cards), Eurozone merchants pay between 3,000 and 4,000 million euros annually, and that the smallest ones pay three or four times more than the large ones.
In any case, the compensation mechanism must be fair, replicating the models that exist now and allowing infrastructure costs to be covered.
Thirdly, the articulation between the ECB’s digital euro and private instruments poses operational challenges. At the moment, financial institutions are looking for technological solutions that make their electronic payment systems (Bizum and Wero) compatible with the digital euro and they fear that their margins will be reduced.
The ECB intends that the digital euro coexists with the private payment systems of commercial banks, that said digital euro be integrated into these private solutions and make them more scalable.
To, above all, guarantee simplicity, in the sense that a small business does not have to have 20 different terminals. Meanwhile, the European Commission and Parliament have been outlining the implementation of the digital euro for more than two years, with the support of Worldline, Capgemini and various cutting-edge start-ups.
Time is short. The approval of the Genius Law by the US last July, which regulates what are known as “stablecoins” – cryptocurrencies backed by the dollar – has undoubtedly accelerated the digital euro project.
The emergence and promotion of these stable cryptocurrencies may become an instrument of geopolitics by President Trump, raising concerns about the financial stability and strategic autonomy of Europe, as it could lead to euro deposits moving to the United States and a further strengthening of the role of the dollar in cross-border payments.
At the moment, nine European banks (UniCredit, ING, DekaBank, Banca Sella, KBC, Danske Bank, SEB AB, CaixaBank y Raiffeisen Bank) They have created a consortium to develop a “stablecoin” in euros, whose launch is scheduled for 2026.
In short, the ability of a State or a monetary union to control and guarantee access to its own currency in digital format is as important as the defense of its physical borders or the security of its electrical grid.
Payments are the nervous system of the economy, and leaving them in the hands of certain interests or foreign infrastructure poses a risk in a world where technology and geopolitics are increasingly intertwined. Powers such as China and India are advancing with their digital currencies to reinforce their sovereignty in payments and protect themselves from dependence on the dollar. Europe cannot be left behind.
*** Mónica Melle Hernández is a professor of Economics at the UCM.