By the mid-2010s, Europe’s payments landscape was undergoing another profound shift. The rise of cryptocurrencies, led by Bitcoin and later Ethereum, introduced a new kind of money—decentralized, borderless, and outside traditional financial control. What began as a niche experiment soon became a global financial phenomenon, challenging central banks’ monopoly over currency issuance.
Bitcoin’s creation in 2009 went largely unnoticed by regulators at first. But as its price and popularity surged in 2017, it captured public attention and drew scrutiny from financial authorities. Europeans began buying and trading digital assets on new online exchanges, while start-ups experimented with blockchain technology to improve payments, contracts, and record-keeping.
The European Central Bank (ECB) initially dismissed cryptocurrencies as speculative and inefficient. Then-President Mario Draghi repeatedly stated that Bitcoin was “not a currency” but a volatile asset without backing. However, officials began to recognize the broader implications of digital innovation for the monetary system.
The emergence of so-called “stablecoins” — cryptocurrencies pegged to traditional currencies — intensified the debate. Facebook’s 2019 proposal for Libra (later renamed Diem) alarmed policymakers across Europe. A privately issued global digital currency, controlled by a tech giant, raised fears about financial stability, privacy, and the erosion of the ECB’s monetary authority.
In response, the ECB launched deeper research into central bank digital currencies (CBDCs). A report that year acknowledged the potential benefits of a “digital euro” to complement cash, enhance payment efficiency, and ensure citizens continued access to risk-free central bank money in an increasingly digital world.
At the same time, the European Commission and national regulators began drafting new rules for crypto-assets, setting the stage for what would later become the Markets in Crypto-Assets Regulation (MiCA). This regulatory groundwork would prove essential as the digital euro project gained momentum.
By 2019, the message from Frankfurt was clear: Europe could not ignore the digital currency revolution. The ECB would have to innovate to protect its role in the payment system and maintain monetary sovereignty in a rapidly changing financial landscape.
The crypto challenge had reshaped the conversation. What once seemed a distant idea — a digital version of the euro — was now viewed as a strategic necessity for the future of Europe’s money.