EU Lawmakers Push Back on Digital Euro as ECB Targets 2029 Launch

The European Union (EU) lawmakers have pushed back against the launch of the digital Euro. The European Central Bank (ECB) renewed its efforts earlier this week for a digital Euro. However, the ECB is facing resistance from the lawmakers over issues ranging from impact on commercial banks and privacy safeguards.

EU Lawmakers Unsure of the Impact of Digital Euro

Speaking before the European Parliament’s economic committee, ECB board member Piero Cipollone argued that a central bank digital currency (CBDC) would guarantee Europeans access to a free and universally accepted digital means of payment, even in the event of severe disruptions such as cyberattacks or network failures. He emphasized that while cash remains vital for resilience and financial inclusion, digital transactions have become “essential to daily life” and require government backing.

Cipollone described the digital euro as a fallback mechanism designed to strengthen the bloc’s financial independence. He noted that much of the EU’s existing payments infrastructure depends on non-European providers, potentially limiting the bloc’s capacity to act swiftly in emergencies. He drew parallels with U.S. initiatives to promote dollar-backed stablecoins, presenting the digital euro as Europe’s strategic response.

Despite the ECB’s assurances, lawmakers raised pointed concerns. Critics argued that an ECB-backed digital wallet could siphon deposits from private banks, making the central bank a more attractive and safer alternative. Pierre Pimpie, a member of the right-wing Patriots for Europe group, warned that “accounts in private banks could be emptied” and objected to the ECB’s authority to set limits on holdings, which he feared could be changed at will during crises.

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Privacy was another pain point. While Cipollone insisted that the central bank would not have access to payer or payee information and promised an offline solution “as good as cash,” doubts lingered among parliamentarians. Doubters worry that central bank control could erode public trust if data safeguards fall short.

The idea of a digital euro has been spoken about since 2023, but it has been put off many times because of political opposition and the 2024 elections. Cipollone laid out a rough schedule, saying that the law might be finalized by the middle of 2026 after getting the go-ahead from the European Parliament, the European Commission, and the European Council. It could take up to three years to build and test the technical infrastructure, which would mean a probable launch in 2029.

The debate is showing a growing divide: the ECB thinks the digital euro is necessary for sovereignty and resilience, but many parliamentarians are still not sure that the project can find a balance between privacy, innovation, and financial stability.