The political debate over the digital euro is gathering pace. “The digital euro is a central project for European sovereignty in payment transactions. Discussions in Davos once again underscored how crucial Europe’s capacity to act in this area has become,” said Joachim Nagel, president of Deutsche Bundesbank, in an interview with Table.Briefings. Several German cabinet members are now working closely on the issue and are pressing for rapid implementation. Added urgency stems from geopolitical uncertainty, particularly the unpredictability of Donald Trump, and Europe’s continued dependence on US payment service providers such as Mastercard, Visa, and PayPal.
The digital euro is being developed by the European Central Bank (ECB) as a state-backed digital equivalent of cash. Its objective is to make European payment systems more resilient and to reduce reliance on non-European providers. The ECB is currently in a preparatory phase, focusing on technical specifications, security standards, and models for integrating the digital euro into the systems of private banks and retailers. The Bundesbank has expressed satisfaction with progress to date.
Criticism, however, remains strong within parts of the financial sector. Ulrich Reuter, president of the German Savings Banks Association (DSGV), has warned against the digital euro in its current form. Payments, he argues, are a highly competitive market rather than an administrative function. The ECB, he says, lacks direct customer experience and market discipline. He also cautions that a multi-billion-euro central bank project could tie up development capacity among European providers for years. Within the industry, the joint initiative Wero is often cited as a more market-driven European alternative.
Nagel has rejected these concerns, defending the ECB’s involvement. “Payment systems are critical infrastructure. This responsibility cannot be left to the market alone,” he said. While private providers are innovative, they are also exposed to commercial and default risks. “That is precisely why the digital euro needs a reliable foundation provided by the central bank.”
Nevertheless, the political path forward remains uncertain. According to Burkhard Balz, a member of the Bundesbank’s Executive Board, around 1,600 amendments have been submitted to the draft legislation prepared by rapporteur Fernando Navarrete Rojas in the European Parliament’s Committee on Economic and Monetary Affairs (ECON). Focus Online first reported the figure. The ECON committee is scheduled to vote on the digital euro legislation on May 5, with the outcome still considered open. The proposal must then also secure approval from the full European Parliament. Only after completing the legislative process would the ECB be able to proceed with implementation, currently planned for 2029. Alexander Wiedmann