From Dependence to Sovereignty: Why Europe Needs a Digital Euro

Abstract

Europe’s payment landscape is rapidly digitising, heightening the strategic importance of the infrastructure that underpins everyday payments. As recent geopolitical developments have demonstrated, dependencies on critical infrastructure can pose resilience risks when external conditions change. The digital euro addresses this challenge by preserving access to central bank money in a digital economy, complementing cash and reinforcing the euro’s role as a monetary anchor. It can also strengthen Europe’s strategic autonomy by increasing the resilience of payments and fostering a more competitive ecosystem based on European standards and governance. Its key features – broad usability across contexts as well as both online and offline capability – are essential for public acceptance and practical relevance. Safeguards, including privacy by design and holding limits to protect financial stability, are not optional add-ons but prerequisites. Ultimately, the digital euro should be seen as an additional European means of payment that strengthens competitiveness and innovation while reducing unnecessary strategic vulnerabilities.