Digital euro promises to guarantee Europe's monetary sovereignty

In an unstable political context, particularly marked by American political changes, the European Central Bank (ECB) and Bank of France stress the fundamental importance of guaranteeing European monetary sovereignty. As such, the digital euro is seen as a strategic lever to enable the euro area to control its financial future, although its implementation remains uncertain.

FACTS

• The preparation phase of the digital euro, which began in November 2023, is now set to expire in October 2025, according to a recent statement by the President of the European Central Bank in March.

• By October 2025, at the latest, the Governing Council of the ECB will have to meet to take the necessary decisions concerning:
  • validation of the project's entry into the deployment phase,
  • defining the stages of deployment,
  • issuing a specific regulatory framework.

• The deployment of the digital euro thus remains to date hypothetical and its implementation could not take place until 2027 or 2028, according to several observers in the sector. Its full implementation would only be possible around 2030.

• The introduction of the digital euro would complement the cash and other payment solutions currently proposed on European territory.

• Piero Cipollone, member of the Executive Board of the ECB, spoke to the European Parliament's Committee on Economic and Monetary Affairs a few days ago to clarify the situation. In particular, it highlighted the potential benefits of the introduction of a digital version of the euro, aimed at:

  • strengthening Europe's strategic autonomy ,

  • offer a sovereign alternative to payment systems dominated by non-European actors,

  • reduce dependence on foreign technologies, including US dollar-backed stables.

ISSUES

• Reiterate the merits of the initiative : The particularly heavy geopolitical context and the reversals of the US presidential administration are contributing to further enhancing the importance of guaranteeing European monetary sovereignty. Today's announcements by the Bank of France and the European Central Bank aim both to shed light on the progress of the digital euro project and to underline the fundamental importance of its next deployment.

• Hypothetic but developing : If the European Central Bank is not moving forward to acknowledge the effective launch of the digital euro at a certain time, its ambitions for the realization of this project remain clear. Nevertheless, they do not seem strong enough for the governor of the Bank of France, François Villeroy de Galhau, who Called Most recently to the acceleration of the project. But the final decision to issue the digital euro depends in particular on the legislative processes under way at European level.

• Cut short of false accusations : A recent speech by the President of the European Central Bank had recently triggered a wave of misinformation about the forthcoming deployment of the digital euro. A situation which prompted the AFP to publish a corrective article, and today also engages stakeholders in the project.

PERSPECTIVE

• The ECB precise sporadically his progress on this digital euro project. Last December, it discussed updating its regulation and examining the expectations of consumers, retailers and payment service providers. She realized a new step point on his work last February, on the theme of studying an offer based on distributed registry technologies, or DLT (Distributed Ledger Technology).

• On the specific theme of monetary sovereignty, France represents a European example, with its national network of payment cards, Banking Cards, and the interbank compensation infrastructure STET. CB also comes from stress its complementarity with Wero, another European monetary sovereignty instrument.

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