Digital euro to boost innovation, secure Europe's sovereignty
Deutsche Bundesbank President Joachim Nagel advocated for the digital euro as a central element of Europe's payment system. Speaking at the International Bankers Forum on June 24, 2026, Nagel highlighted its role in addressing payment digitalization, European sovereignty, and global competition.
Central bank money for the digital age
Deutsche Bundesbank President Joachim Nagel emphasized the fundamental shift in payment behavior, noting that cash accounted for only two-fifths of point-of-sale payments in the euro area in 2024, down from almost half in 2019.
Online purchases doubled in value, while the share of outlets not accepting cash tripled to 12 percent.
The digital euro is presented as a digital complement to cash, ensuring central bank money remains accessible and relevant in this evolving landscape.
It aims to provide a basic public infrastructure, fostering trust and common technical standards, without crowding out private solutions.
Nagel highlighted new business opportunities for the financial sector, such as conditional payments.
Safeguards like holding limits and the absence of interest on digital euro balances are crucial to preserve financial stability and bank lending, with a 'waterfall approach' for larger transactions.
Safeguarding digital sovereignty
Nagel highlighted Europe's critical dependence on non-European providers for its payment infrastructure, noting that over two-thirds of euro area card payments are settled externally, and 13 countries lack national solutions.
He stressed that convenience must not come at the expense of sovereignty, especially given recent geopolitical developments.
The digital euro would serve as an autonomous, European-controlled basic infrastructure, promoting innovation while upholding European values like data protection and privacy.
The Eurosystem would only access pseudonymised user data, and an offline mode would offer privacy comparable to cash, ensuring transactions are not 'laid bare'.
Beyond payments: Europe's digital future
The digital euro is more than just a payment instrument; it is a crucial building block for Europe's standing in the evolving digital financial world.
While the euro's stability is established, its infrastructure must adapt to new digital realities, including tokenised markets and private digital currencies.
This initiative, alongside projects like Pontes for wholesale CBDC, is essential to ensure the euro remains competitive and practical in the next technological era.