Bundesbank's Balz on Europe's digital finance crossroads
Burkhard Balz, Executive Board Member of the Deutsche Bundesbank, addressed the future of European finance, emphasizing the digital euro and wholesale CBDC as key to strategic autonomy. He delivered a keynote speech at the London Regional Chapter of the Atlantik-Brücke on February 25, 2026.
The digital euro's path to 2029
The digital euro is central to Europe's goal of modernizing its financial system and strengthening strategic autonomy, preserving access to central bank money in an increasingly digital economy.
It will complement cash, support integration, and enhance resilience and sovereignty, while fostering private innovation.
The Bundesbank is committed to developing its core infrastructure, with Germany serving as a future operating site.
Balz highlighted the current fragmentation in Europe's payment landscape, noting the absence of a truly unified European digital payment method 25 years after the euro's launch.
The digital euro aims to provide 350 million citizens with convenient, secure, and interoperable digital payments across borders.
With legislative proceedings ongoing in Berlin and Brussels, the Eurosystem aims to be ready for first issuance in 2029, making it a tangible political project for greater sovereignty.
Wholesale CBDC: Capital market evolution
Modernizing Europe's financial ecosystem requires evolving wholesale financial market transactions, the backbone of capital markets.
Distributed ledger technology (DLT) and tokenization are reshaping how financial instruments are issued, traded, and settled, promising streamlined processes, reduced operational risks, and faster, more transparent settlement.
Wholesale CBDC offers a secure, programmable, and 24/7 settlement asset anchored in central bank money, forming the foundation for tokenized financial markets.
The Eurosystem pursues this through two initiatives: Pontes, a short-term solution connecting DLT platforms to existing settlement infrastructure, with a pilot phase launching this year; and Appia, a long-term vision exploring how tokenized assets and central bank money can coexist seamlessly on unified platforms.
Stablecoins: The dollar dependence risk
The dominance of dollar-denominated stablecoins presents a strategic vulnerability for Europe, risking new forms of dependence in digital finance.
This imbalance underscores the urgent need for robust euro-denominated private money, including well-regulated tokenized deposits and high-quality stablecoins.
Without these, Europe risks undermining its monetary sovereignty and the euro's relevance in the evolving digital landscape.