Q2: How could the digital euro boost Europe’s strategic autonomy?

The European Central Bank answers:

The digital euro would offer a pan-European payment solution, available throughout the euro area, under European governance and operated by European providers.

Digital payments in the euro area remain fragmented, differing by country and by use case. More than half of all national markets in the euro area do not have national digital payment solutions for payments in shops, and those that do exist mainly cater only to national markets and specific use cases. This means consumers have to rely on a small number of non-European companies that dominate the market. The digital euro would help reduce Europe’s dependence on non-European payment service providers, and offer people the choice of using European solutions.

Through open standards and by providing a public infrastructure for digital payments, the digital euro could enable providers to easily scale up to pan-European solutions, thereby making the European payments landscape more competitive and innovative.

Overall, the digital euro could turn Europe into a global front-runner in digital finance, where innovation serves the public good.

We answer them:

While the digital euro could indeed by law reduce the dependence on non-European payment systems and technologies, it is worth noting thatits offline functionality relies on proprietary hard- and software from mostly non-European phone and hardware manufacturers. Such proprietary design is also in contrast to the mention of “open standards” added in a recent revision of the FAQ. Since neither the ECB nor the draft regulation establish a meaning for this term, it remains unclear what it effectively entails. To enable true competition without gatekeepers in the payment market, the digital euro should be based on fully free/libre and open-source software instead of a proprietary design, as further elaborated on in (KF6)

The European payment market is already dominated by two major companies, WorldLine and G+D, both of which are also key commercial players for the digital euro [1;2;3]. It is thus questionable to which extent the digital euro would foster competition instead of consolidating the market dominance of few global stakeholders. As a precedence, the thresholds for contribution to the digital euro design have been set very high by the ECB, effectively narrowing the potential group of contributors to very few big companies (cf. Q17).

On the contrary, the mere existence of the digital euro as government project with presumably low fees is expected to discourage investment in payment technologies by private actors [4]. Competing with a government-subsidized service is rarely viable in the commercial sector. As a result, the digital euro project may actually stifle competition and innovation, and harm private European initiatives already existing today that aim at pan-European coverage (e.g., Wero) [5]. On the other hand, the published documents on the digital euro [6;7] do not contain evidence of innovative technology to improve efficiency, resilience or fraud protection.

The digital euro is also unlikely to be a “global front-runner” in the realm of CBDCs. This is not only because it lags behind other global initiatives (such as the Chinese digital yuan, the Indian digital rupee, the Japanese digital yen, or the Brazilian digital currency Drex and instant payment system Pix) but also because it is designed to be based on proprietary European technology. This creates a barrier for adoption in other countries, as they must weigh the risk of potential future sanctions. Consequently, most large countries today favor either domestic or open technologies [8]. To become a global player, a CBDC technology would need to be fully free/libre and open-source software (KF6), which is incompatible with the proprietary nature of the digital euro.

  1. E. Bank, ECB selects digital euro service providers, ECB, Oct. 2, 2025. [Online]. Available: https://www.ecb.europa.eu/press/intro/news/html/ecb.mipnews251002.de.html [Accessed: Jan. 14, 2026].
  2. Giesecke+Devrient, New survey indicates digital euro must also work offline. https://www.gi-de.com/en/group/press/press-releases/new-survey-indicates-digital-euro-must-also-work-offline, 2024.
  3. Worldline, Worldline helps the ECB to shape future digital euro by successfully delivering a front-end prototype. https://worldline.com/en/home/top-navigation/media-relations/press-release/worldline-helps-the-ecb-to-shape-future-digital-euro-by-successfully-delivering-a-front-end-prototype, 2023.
  4. H. Næss-Schmidt, C. Zienau, R. Cipriano, and J. Brink, Effects of a digital euro on financial stability and consumer welfare. Copenhagen Economics, 2023.
  5. F. Navarette, Do we really need the digital euro: A solution to what problem exactly?, European Parliament, 2025.
  6. European Commission, Proposal for a regulation of the european parliament and of the council on the establishment of the digital euro, 2023. [Online]. Available: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52023PC0369
  7. European Central Bank, A stocktake on the digital euro - summary report on the investigation phase and outlook on the next phase. https://www.ecb.europa.eu/euro/digital_euro/timeline/profuse/shared/pdf//ecb.dedocs231018.en.pdf, 2023.
  8. Chavanette Advisors, Galactic grid: Your guide to the complex landscape of retail central bank digital currency technology providers. Chavanette Advisors, 2024.