Senior executives at Deutsche Bank have called for a pragmatic and carefully phased rollout of the digital euro, warning that design choices could have far-reaching consequences for Europe’s banking system, financial stability, and monetary sovereignty.
In an op-ed authored by James von Moltke, President and Chief Financial Officer of Deutsche Bank, Katharina Paust-Bokrezion, Head of Payments and Digital Policy, and Manuel Klein, Head of Market Management Payments and Digital Currencies, the authors argue that Europe is approaching a defining moment for its monetary system. They say the digital euro is no longer just a technical project but a strategic response to global shifts in payments, geopolitics, and digital finance.
The authors point to the rapid rise of stablecoins, particularly those denominated in U.S. dollars, as a key challenge for Europe. Policy decisions in the United States that favor regulated stablecoins while halting further work on a central bank digital currency have, in their view, intensified global competition in digital money.
According to the Deutsche Bank executives, the digital euro, euro-denominated stablecoins, and tokenised bank deposits should be seen as a “strategic triad” that together will shape the future of European money. While the EU’s Markets in Crypto-Assets Regulation and the ECB’s PISA framework provide an initial foundation, they argue that further regulatory upgrades are needed to address cross-border risks, prudential treatment, and global interoperability.
Banks Warn of Deposit Outflows and Fragmented Policy
A central concern raised in the op-ed is the potential impact of a retail digital euro on commercial bank deposits. The authors warn that large-scale deposit outflows could raise funding costs for banks, constrain lending, and weaken the sector’s ability to finance Europe’s defence, infrastructure, and digital transition.
To mitigate these risks, they call for a well-designed holding limit for digital euro balances and a fair compensation model for banks and payment service providers involved in distribution. They stress that safeguarding the banking sector’s capacity to invest and innovate must remain a core design principle of the digital euro project.
The executives also criticise what they describe as a fragmented EU payments policy landscape. They note that the EU’s retail payments strategy, published in 2020, no longer reflects current realities and risks creating overlapping or competing initiatives. Without a holistic vision that integrates the digital euro, stablecoins, and private sector payment solutions, they warn that innovation efforts could undermine one another.
Instead, the authors argue for closer collaboration between the Eurosystem and private sector players. They highlight initiatives such as the European Payments Initiative and national solutions like Spain’s Bizum as evidence that the private sector can deliver pan-European payment capabilities when supported by a clear strategic framework.
Phased Launch and Focus on Wholesale Use
Looking ahead, the Deutsche Bank executives recommend a clearly phased approach to launching the digital euro. They suggest starting with either online or offline functionality, rather than attempting to introduce both at once, and expanding features gradually over time.
They also urge policymakers to place greater emphasis on wholesale applications of digital money, including tokenised securities settlement and cross-border payments. Projects such as Appia, Ponte, and Agorá, which explore wholesale central bank money and tokenisation, are seen as critical to strengthening the euro’s international role and advancing the EU’s Savings and Investment Union.
As EU lawmakers and member states continue to assess the legal framework for the digital euro, the authors conclude that success will depend on coherence, collaboration, and careful sequencing. In their view, the digital euro must reinforce, not weaken, Europe’s financial system if it is to serve citizens and businesses over the long term.