Key Points:
- The ECB designed the digital euro to keep banks central.
- New currency aims to compete with non-European tech giants.
- Fee caps will undercut expensive international card networks.
- Pricing structure protects local schemes like Bancomat and Bizum.
A senior official from the European Central Bank (ECB) assured bankers on Wednesday that the upcoming digital euro will not put them out of business. Instead, the design of the new currency focuses specifically on keeping traditional banks at the heart of the eurozone’s payment system.
Many financial institutions worry that a currency managed directly by the central bank could make them obsolete. However, ECB board member Piero Cipollone argues that banks face a much bigger threat from private tech companies and cryptocurrencies. Without a government-backed digital alternative, banks risk losing their connection to customers entirely as cash usage declines.
Speaking to Italy’s banking association, Cipollone explained that the digital euro acts as a shield. If banks lose control of payments to outside tech firms, they also lose valuable customer data. Without access to that transaction history, banks would struggle to sell loans and other profitable services to their clients.
The ECB also plans to use the digital euro to protect local European payment systems, such as Italy’s Bancomat or Spain’s Bizum. To achieve this, officials are setting up a strategic fee structure. Shop owners will pay fees for the digital euro that are lower than those of expensive international networks like Visa or Mastercard.
However, the ECB will set these fees slightly higher than the cheap domestic schemes. This pricing strategy ensures that local European card systems remain the most cost-effective option for merchants, while the digital euro serves as a competitive middle ground. This effectively targets the dominance of American payment processors, which currently handle more than 75% of European transactions.
The project is finally gaining real political momentum after stalling for two years. Both the European Parliament and the EU Council recently gave their backing to the plan, declaring the digital currency essential for Europe’s future economic security.
