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The digital eurois taking shapeagainst the backdrop of an already well-advanced transformation of payment habits and the infrastructure landscape of the European market. In the euro area, cash continues to play a significant role in local payments, although its share has steadily declined in recent years; at the same time, the use of digital channels—and, in particular, online payments—has grown, now accounting for36% of the value of daily payments in the European Union, up from18% in 2019.
In this context, the most significant change is that the point of access to payment transactions is gradually shifting towardwallets, apps, and interfacescontrolled by operators capable of integrating payment, authentication, data, and services.
This trend is set to gain even more momentum, given that, globally,digital wallets couldbe used by as many as70% of consumers by 2030. It is precisely this evolution that makes the issue of the digital euro relevant from a competitive standpoint as well, all the more so in a European market that remains fragmented along national lines and exposed to the dominance of international operators: in card-based e-commerce, for example,Visa and Mastercardtogether account for about90% of the market.
In this context, the debate over the digital euro often tends to swing between two extremes: on the one hand, a view that presents it as an extension ofpublic money into the digital economy; on the other, a more technical view that reduces it to a new payment instrument. The current state of the European project suggests a more nuanced perspective: today, the Digital Euro represents above all a pivotal point wherethree structural tensions in the payments market converge.
The first concerns economic sustainability for banks and payment service providers; the second, the competitive pressure exerted bystablecoinsand other private forms of digital payment; the third, the urgent need to address inefficiencies in cross-border payments. In this context, the ECB’s project is part of a broader redefinition of the European monetary ecosystem and payment infrastructure. At the heart of this is the emerging balance betweenpublic money, private innovation, and payment infrastructures, along with the effects that this balance may have on business models, the competitiveness of operators, and the European system’s ability to safeguard its autonomy in digital payments.
The introduction of the digital euro would have effects that extend far beyond the strictly infrastructural scope of payments, impactingbanks and payment service providers (PSPs), merchants and businesses, consumers, and, more broadly, the competitive landscape of the European market in different ways. For intermediaries, the central issue remains the economic viability of the initiative, which must be viewed within the context of a broader transformation of their role. Banks, post offices, and PSPs would be called upon to distribute the new instrument and manage onboarding, wallets, customer support, controls, liquidity, and real-time operations, while maintaining a direct relationship with the customer in a context where the basic service for citizens would remain accessible and free of charge.
The impact, therefore, extends beyond the compensation model: it involves rethinking operational architectures, integration with the European platform, the ability to operate24/7/365, managing features such as offline, waterfall, and reverse waterfall, and, above all, the ability to build value-added services on a shared infrastructure. In this context, the digital euro can serve as a means for operators to strengthen their competitive position and reduce their dependence on international circuits, although it will require investments, new skills, and more advanced process governance.
Formerchants, businesses, and consumers, the impacts take different but equally significant forms. On the demand side, the digital euro promises a public, universally accepted means of payment that can be used for in-store, online, and peer-to-peer transactions, with a level of accessibility designed to serve even users without bank accounts, as well as offline functionality aimed at ensuring operational continuity and a degree of privacy closer to that of cash. For consumers, this could mean greater ease of use, a wide range of choices among wallets offered by different providers, and the potential integration with additional identity, authentication, and personal finance services.
For merchants and businesses, however, the most obvious benefit lies in the prospect of a standardized pan-European infrastructure, capable of strengthening bargaining power, reducing dependence on non-European schemes, and opening the door to new commercial services—ranging from integration with accounting and point-of-sale systems to advanced checkout, loyalty programs, conditional or event-triggered payments, and potential applications in the B2B sector and digital services. At the same time, these stakeholders also face the burden of adapting terminals, processes, and IT security.
Overall, the digital euro is shaping up to be an infrastructure capable of redistributingcosts, opportunities, and responsibilitiesacross the entire value chain, acting as a potential catalyst for competitive rebalancing, service innovation, and greater integration of the European payments market.
The digital euro is taking shape in a market characterized by the growing prevalence ofprivate instrumentsdesigned to address needs that conventional money and existing infrastructure struggle to meet. This landscape includes stablecoins and new forms of digital payment developed in environments that are natively interoperable, programmable, and always-on.
Their significance stems primarily from their ability to address highly operational areas—such as digital ecosystems, the regulation of tokenized assets, cross-border transfers, and business-to-business use cases—where speed of execution, service continuity, and integration with application logic provide a tangible competitive advantage, rather than from the potential to completely replace the payment methods already in widespread use in the European retail sector.
It is within this context that the Digital Euro must be viewed—as a public response to a market in whichprivate digital currenciesare gaining increasing prominence, to the point of influencing the redistribution of value and control along the payment chain.
Forbanks and payment service providers (PSPs), the competitive pressure exerted by these tools extends beyond transaction volumes and threatens to undermine their central role precisely in the areas where customer relationships, data, value conversion, and high-margin services tend to be concentrated.
Stablecoins, in particular, operate within a more fragmented and global model, in which issuers, wallet providers, digital platforms, and specialized operators can take on functions that, under the traditional paradigm, were more closely tied to intermediaries. At the same time, these solutions open up significant opportunities: they can make international payments more efficient, support digital-native use cases, and foster the development of services related to custody, conversion, compliance, and interoperability between traditional finance and tokenized markets.
From this perspective, private digital currencies should be viewed primarily as a factor that accelerates the competitive transformation of the market. Within this framework, the Digital Euro thus takes on an additional role, linked to the potential to help shape a framework in whichinnovation, trust, accessibility, and infrastructure oversightremain compatible with the objectives of stability and integration of the European market.
It is incross-border paymentsthat the transformative potential of digital currencies is most evident, as it addresses an area where the inefficiencies of the traditional model remain particularly apparent: high costs, processing times that are not always compatible with the needs of the digital economy, a lack of transparency regarding fees and exchange rates, and a heavy reliance on complex chains of intermediaries. It is no coincidence that the G20 roadmap aims to reduce the average cost of international retail payments to below 1% and that of remittances to below 3%, along with greater speed, transparency, and accessibility.
From this perspective, public and private digital currencies can serve as a concrete tool for simplification, enabling more direct, continuous, and interoperable settlement across jurisdictions, infrastructures, and different entities. Estimates from the International Monetary Fund also help gauge the significance of this issue: in an illustrative scenario, a60%reductionin transaction costscould generate total savings of approximately$510 billion, equivalent to0.3% of global cross-border flowsand0.5% of global GDP.
The trials already underway confirm that this evolution does not concern a single tool, but rather the development ofnew payment architectures. Projects such as mBridge and Jura demonstrate how multi-CBDC platforms and DLT infrastructures can reduce settlement times, mitigate operational risks, and improve the efficiency of international transactions; at the same time, the strengthening of technical interoperability, the widespread adoption of standards such as ISO 20022, and the automation of compliance controls indicate that the real leap forward will depend on the ability to integrate settlement, data, and messaging into more coordinated ecosystems. In this context, the Digital Euro is also significant for the contribution it can make to strengthening European autonomy in international flows: for banks and PSPs, this means dealing with new liquidity models and settlement infrastructures; for businesses and merchants, it means the prospect of faster, less opaque, and potentially less expensive international payments.
From this perspective, theDigital Eurois caught in a very real tension: preserving the role of public money in an ecosystem where distribution, acceptance, and user experience are increasingly dominated by private—and often non-European—infrastructures. At stake are the introduction of a new form of payment and, at the same time, Europe’s ability to strengthen the coherence of its payments market at a time when the most strategic control points in the value chain are being redefined.
This is also why the significance of the Digital Euro will be measured primarily by its ability to make an impact in the areas where market value is currently being redistributed: the economic role of intermediaries, control over the wallet and the user interface, the integration of payments, data, and services, and the efficiency of cross-border infrastructure. It is along these lines that the European project can take on systemic significance, driving innovation in payments and supportingconsistency, integration, and oversight capabilitiesin a rapidly evolving market.