European payment system: Considerations on issuing a digital euro
The European Banking Federation (EBF), integrated by the national banking associations from across Europe, released this paper analyzing potential implications of the issuance of a Central Bank Digital Euro in the European payments landscape, and providing some recommendations on its implementation and final design features, to be taken into account in the “investigation phase” on the digital euro project, currently being carried out by the European Central Bank (ECB).
The report highlights the following aspects:
- The starting point in the European payments system is fine: The European Union has an efficient, secure and well-functioning electronic payments market. The ECB should clarify how a digital euro will fit in this system and what will be the improvements for the public in the already high-quality and cost-effective European payment system.
- The system is not perfect and has some challenges: The main ones are identified in the report: the lack of a ‘homegrown’ pan-European payment solution, the increasing importance of BigTechs in payments and adjacent areas, and the potential impact of global stablecoins and foreign CDBCs. European banks are rising up to these challenges through the European Payment initiative (EPI) and other ongoing developments (for example on instant payments). These initiatives will require significant investments and in order to be carried out, they will need certainty about how the digital euro will impact them, or about what will be the cost to the private sector of integrating the digital euro into the current European payment system.
- The impact of a digital euro on the payments system will depend on its final design features. The report considers some aspects essential for the design of a digital euro, some of which are as follows:
-Consistency with the European Commission and Eurosystem’s Retail Payments Strategies: Clarify the overall vision and strategy of a future EU payments landscape taking into consideration all ongoing innovation and developments in payments. A digital euro as a “raw material” will not be a determining factor in the success of a pan-European payment solution.
-Cost and business models: business models for intermediaries taking their role in offering a digital euro should be possible. It cannot be expected that merchant/corporate acceptance of digital euro can be for free.
-Programmability of payments will be key in the future payments landscape; therefore, it is important to allow for the programmability of digital euro payments.
-Data usage: the digital euro should not aim for transaction data only being accessible to the ECB, as the data should serve to strengthen risk management, improve cybersecurity and consumer protection, and open up new business and innovation opportunities.
Filter results
According to the World Economic Forum´s Global Risk Report 2026, geoeconomic confrontation, mis- and disinformation and societal polarization make up the top three short-term risks, while environmental risks dominate in the long term.
According to the World Economic Forum, over the last few years AI has moved from experimentation to workflow integration, promising systemic gains in productivity while also raising critical questions around economic inclusion, values, trust and resilience.
According to AFME, a clearer, more coherent, and proportionate regulatory environment, without unnecessary layers and focuses on growth and competitiveness, is keyl to increase investor confidence, unlock private capital and deepen European capital markets
According to the Center for the Governance of Change at IE University, Europeans support technological progress if it reinforces security, inclusion, and social welfare; but resist it when change feels imposed, opaque, or misaligned with their values.
According to a recent report released by CEPS, European financial regulators should adopt competitiveness as a formal secondary objective, following the precedent established by the UK's Financial Services and Markets Act 2023.
According to the OECD. SMEs and start-ups that grow rapidly contribute significantly to job creation, economic growth and competitiveness. Indeed, SMEs that grow by one-third over a three-year period, contribute about as much to job creation as large firms.
According to @McKinsey, banks must prepare for a new growth curve. Strategic precision —the ability to combine technology, capital discipline, and deep customer insight— will distinguish the leaders from the laggards.
According to Kristalina Georgeva IMF Managing Director, lifting growth requires three things: one, regulatory housecleaning to unleash private enterprise; two, deeper regional integration; and three, preparedness to harness AI.
According to The European House – Ambrosetti, the European Union has an opportunity to boost competitiveness and growth by simplifying regulatory and supervisory frameworks, particularly in the areas of sustainability and the financial sector.
According to Ramón Casilda Béjar, Spain, in today’s complex geopolitical landscape, has the opportunity to strengthen its role as a bridge and connecting country between Ibero-America and the European Union, revitalizing investment flows in both directions.
According to @ECB, in moments of acute stress, the public often turns to physical currency as a reliable store of value and a resilient means of payment, underscoring the crucial role it plays above and beyond everyday transactional convenience
According to Juan S. Mora-Sanguinetti, in Spain a 10% increase in regulatory volume leads to a 0.5% drop in employment in companies with fewer than 10 employees.