Under the pressure of the US dollar stablecoin, the EU accelerates the implementation of the digital euro.

The EU is at a critical Node in the development of Digital Money: as the use of cash continues to decline, payment systems have long relied on American companies such as Visa and Mastercard, while the adoption rate of USD stablecoins continues to rise—these factors are driving the EU to accelerate the implementation process of the digital euro.

On September 19, at the EU finance ministers' meeting held in Copenhagen, the finance ministers of member states reached an agreement with senior officials from the European Central Bank and EU commissioners on the advancement steps of the digital euro. Reuters used the term "compromise" in its report, implying that this decision may carry the connotation of being a forced agreement.

The chairman of the meeting, Pascal Donohoe, stated at a joint press conference that before the European Central Bank makes a final decision on issuance, the Council of EU Finance Ministers will have the opportunity to participate in discussions and review relevant topics. In addition, the Council will have the final say on whether to issue a digital euro and on issues such as setting the holding limit for each citizen.

Although the basic direction of the "compromise" has been clarified, many technical details, such as the upper limit of holdings per person, issuance rhythm, account design, and clearing mechanisms, have not been publicly disclosed at this meeting.

####The strategic intentions of the European Central Bank

The President of the European Central Bank, Christine Lagarde, emphasized at the meeting that the digital euro is not only a payment tool but also a political proposition, reflecting Europe's determination to maintain sovereignty in key infrastructure and cross-border payment areas. She pointed out that if Europe continues to rely on American payment systems like Visa and Mastercard, it may lose its core discourse power in the digital age.

Lagarde has urged the European Parliament on multiple occasions to accelerate the relevant legislative process to avoid falling behind in terms of monetary technology. She believes that with the rise of private stablecoins and digital financial services, the integrity and competitiveness of the euro system could be eroded if there is a lack of a digital euro.

Philip Lane, the chief economist of the European Central Bank, previously pointed out that about two-thirds of card payment transactions in the eurozone are processed by American payment companies such as Visa and Mastercard. This dependency constitutes an external risk to the payment infrastructure: changes in US policies, regulations, or international relations may indirectly affect aspects such as the incident response, cost structure, or data processing of European payment networks.

According to Cryptopolitan, the usage of stablecoins in the European region has increased from 16% in 2024 to 34% in 2025, with most of the stablecoins denominated in US dollars.

In addition, insiders from the central bank have revealed that in response to significant financial or technological risks, the digital euro will be designed as an "alternative payment path." That is, when the banking system or payment network is attacked or fails, residents can still make daily payments through a central bank-supported electronic wallet.

####The lag in regulatory processes

Although the finance ministers' meeting reached a compromise on advancing the roadmap, there is still a long process from proposal to formal legislation. As early as June 2023, the European Commission proposed a draft law for the digital euro, but for it to take effect, it still needs to obtain joint approval from the European Parliament and the European Council (i.e., the governments of the member states).

The council hopes to complete its internal review by the end of 2024, but some member states remain reserved on issues such as privacy protection, financial stability, and national sovereignty. At the European Parliament level, the rapporteur, center-right MEP Fernando Navarrete, has taken a cautious stance on the draft, having referred to the digital euro as a "last resort" and questioning its necessity.

Fernando stated: "From a cost-effectiveness perspective, the digital euro is not the best solution. In the constantly evolving narrative from the European Central Bank, the digital euro may raise significant public concerns about data privacy, while the allocation of responsibilities in areas such as fraud prevention and anti-money laundering also needs careful evaluation."

According to Politico, the European Central Bank hopes to complete all political approval procedures in the first half of 2026, followed by a construction and testing period that could last up to three years. This means that even if the roadmap progresses smoothly, ordinary consumers may not be able to actually use the Digital Money Euro until 2028.

####Concerns and Opposition Voices in the Banking Industry

The banking industry has a cautious, even opposing attitude towards the launch of the digital euro. Some bank executives are concerned that if the public shifts their deposits to digital wallets backed by the central bank, the deposit base of traditional banks may be weakened, thereby affecting their lending capacity and profit margins. This concern about "deposit outflow" has been repeatedly mentioned in forecasts and consultation reports from central banks in multiple countries.

In addition, many banks have raised questions about the allocation of operational costs and technical responsibilities. Deploying supporting systems such as payment gateways, clearing interfaces, anti-money laundering monitoring, and customer identity verification requires substantial investment in funds and operational resources. If the profit mechanism is not designed reasonably, banks may bear excessively high risks.

Privacy protection is also a key focus of opposition voices. If the accounts or transaction data of the digital euro are designed to be traceable or monitorable, public trust in it may significantly decline. Countries like Germany and the Netherlands insist that the highest standards of privacy protection measures must be taken to prevent the disclosure of personal consumption information in payment behavior.

There are also views that, as the global payment competition landscape changes, the appeal of the digital euro may be diluted. On the other hand, Europe may also face the risk of "fragmentation of digital currencies" in the future: that is, different member states developing their own central bank digital currencies (CBDCs) or payment systems, leading to difficulties in regional coordination.

The compromise reached at the Copenhagen conference marks a significant breakthrough, but the digital euro still faces many challenges before it can be fully realized.