Digital euro offers banks new opportunities and strengthens European autonomy

The digital euro is designed to be a springboard for innovative digitalisation strategies in retail payments, directly addressing concerns about central bank competition with commercial banks.

Banks will manage digital euro accounts, preserving strong customer relationships and access to crucial creditworthiness data, essential for financing the economy.

The proposed compensation model ensures banks are adequately remunerated for services, with the Eurosystem not charging scheme and processing fees, thereby reducing overall costs.

This infrastructure allows banks to build value-added services, generating new revenue streams and strengthening their competitive edge against non-bank financial sectors.

The digital euro's innovation platform has already identified key benefits like conditional payments, enabling advanced services across the euro area.

The digital euro aims to strengthen bank business models by enabling co-badging with domestic European payment schemes on physical cards.

This allows European debit cards to be used across the continent without relying on international card schemes, addressing a gap where many euro area countries depend on non-European solutions for in-store and e-commerce payments.

Furthermore, the digital euro's infrastructure can provide instant reach for banks' account-to-account payment solutions, akin to the standardisation of USB-C.

This strengthens the competitive position of European digital wallets, allowing banks to retain full interchange fees from big tech payment solutions.