Digital Euro to ‘complement private means of payment’ – ECB

Europe’s long-anticipated digital euro is edging closer to reality, with senior EU policymakers stressing that the new currency will strengthen – not disrupt – the existing payments ecosystem.

In a jointly written article, Piero Cipollone, Member of the European Central Bank’s Executive Board, and Valdis Dombrovskis, Executive Vice-President of the European Commission, emphasised that the digital euro is designed to “complement private means of payment” rather than replace them.

Their message comes as Europe’s payment habits continue to shift rapidly towards digital channels, raising questions about autonomy, resilience and the future role of cash. Cipollone and Dombrovskis argue that while Europeans are increasingly paying online and through private platforms, a public digital alternative is needed to ensure stability, privacy and universal access.

Why a digital Euro?

Mr Cipollone and Dr Dombrovskis frame the digital euro as the natural next step in the long evolution of money, tracing a line “from barter to coins to banknotes to cards.” As technology changes how Europeans live, shop and transact, they argue it is only logical that the euro should adapt too.

While they emphasise that cash remains essential – “Euro coins and banknotes are not going anywhere” – the rise in digital payments fuels the need for a public, EU-wide digital means of payment that is as reliable and privacy-protecting as physical cash. The digital euro, they say, is intended “to complement, not replace, cash.”

Two pillars of the single currency package

The policymakers highlight that the European Commission’s 2023 Single Currency Package contains two legislative proposals currently under discussion.

1. Safeguarding access to cash

The first proposal aims to ensure people and businesses can continue using banknotes and coins across the euro area. The ECB is also working on the “next generation of euro banknotes with a new design” to keep them secure, sustainable and relatable.

2. Establishing a framework for the digital euro

The second proposal sets out the foundations for a digital euro, which they say must be “free, simple and inclusive.” Crucially, it will be accepted for any digital payment across the eurozone and will provide “the highest cash-like privacy protection standards.”

It is also designed to work both online and offline – a key feature intended to mimic the resilience and simplicity of cash.

Perhaps the strongest argument presented is strategic rather than technological.

Mr Cipollone and Dr Dombrovskis warn that Europe’s payments ecosystem is “dominated by non-European providers.” Without a European digital alternative, the EU risks becoming dependent on foreign-owned companies at a time they describe as “an increasingly polarised and fragmented world.”

They argue that this lack of autonomy “deeply impedes Europe’s ability to act autonomously on the world stage” and could threaten the EU’s economic security. Developing a digital euro is therefore seen as essential for strengthening Europe’s resilience and reducing external dependencies.

Importantly, they stress that the digital euro “will not compete with private means of payment” but rather complement them, helping European fintech players scale and innovate.

The road to 2029

According to the authors, 2026 will be a pivotal year. EU leaders have welcomed progress and are urging swift completion of legislative work. If the legal framework is adopted next year, the ECB expects to begin a pilot phase in 2027.

The central bank is preparing for potential issuance by 2029, though the final decision depends on lawmakers.

The timing is symbolic: in 2026, the euro area expands to include Bulgaria as its 21st member – a reminder, Mr Cipollone and Dr Dombrovskis note, that the euro remains “a mark of Europe’s economic strength and a symbol of our unity in the world.”

The authors conclude with a simple assertion: “The digital euro is an idea whose time has come.” It represents not only technological progress, they argue, but a strategic step toward ensuring the euro’s future competitiveness, resilience and relevance in a rapidly digitising world.

For businesses, consumers and financial institutions across Europe – including Malta – the digital euro could reshape how payments are made, who provides them, and how Europe positions itself in the global digital economy.