Digital euro: Anchoring Europe's strategic autonomy
Deutsche Bundesbank President Joachim Nagel emphasized the digital euro's crucial role in securing Europe's strategic autonomy in a digital future. Speaking in Brussels, Nagel highlighted the need for a European digital payment option amid evolving technologies and geopolitics.
Sovereignty in digital payments
Nagel opened with an anecdote about the lack of a European digital payment option on a European airline, underscoring the current reliance on non-European providers like Mastercard, Visa, Apple Pay, and Google Pay.
He stressed that digital payment systems are critical infrastructure, and without sovereignty in this field, true strategic autonomy is hardly conceivable.
Geopolitical changes are forcing central banks to rethink the architecture of money and payments, with choices now shaping Europe's resilience for years.
Card payments, for instance, accounted for 57 percent of cashless transactions in the euro area in the first half of 2025, with around two-thirds processed by US providers.
This dependency leaves Europe vulnerable to external decisions, making the digital euro a key project to reduce such reliance and strengthen Europe's capacity to act.
Renewing central bank money's role
The growing digitalisation of economies is rapidly changing payment habits, with cash accounting for only 24 percent of the total value of day-to-day payments in the euro area in 2024.
The share of merchants not accepting cash has tripled to 12 percent over three years, while e-commerce value doubled from 18 percent to 36 percent between 2019 and 2024.
Nagel clarified that the digital euro is not about abolishing cash but complementing it, ensuring central bank money maintains its crucial role in underpinning confidence in an increasingly digital world.
It aims to reduce fragmentation in euro area payments, where over 100 national digital solutions exist but no single European instrument covers the entire area.
The digital euro's common infrastructure would act as a catalyst for efficiency and innovation, fostering a genuine public-private partnership to overcome fragmentation.
A vision, but a complex path
Nagel's speech articulates a clear and ambitious vision for the digital euro as a cornerstone of European sovereignty.
While the strategic rationale is compelling, achieving widespread adoption and seamless integration across diverse national markets presents significant operational hurdles.
The emphasis on privacy and offline functionality addresses key public concerns, yet the ultimate success hinges on overcoming technical complexities and securing broad political and public buy-in.
The legislative process, though progressing, is merely the first step in a long and intricate journey towards a truly autonomous European digital payment landscape.