The European Central Bank is increasingly presenting the digital euro as more than a payments project, positioning it instead as part of Europe’s broader response to a more fragile, fragmented and uncertain global economy. In speeches delivered in mid-January, senior ECB figures linked digital public money to monetary sovereignty, financial stability and Europe’s ability to withstand geopolitical shocks.
Speaking on 14 January, the European Central Bank argued that the foundations of the global economic order are shifting in ways that directly affect the euro area. Trade fragmentation, geopolitical tensions and growing reliance on non-European financial infrastructure are no longer abstract risks but concrete vulnerabilities that policymakers must address.
From payment choice to strategic infrastructure
The ECB’s message is clear. As cash usage declines and private digital payment solutions expand, public money must remain usable in everyday digital transactions. Without a digital form of central bank money, Europeans could become structurally dependent on a small number of foreign-owned card schemes and payment platforms.
That dependency matters most in times of stress. The ECB has repeatedly warned that privately operated systems may not always align with public policy objectives, particularly in crises. A digital euro, in this framing, is designed to ensure that citizens and businesses retain access to risk-free public money regardless of which private providers dominate the market.
The emphasis on offline functionality and cash-like privacy reflects this logic. Offline payments are presented not as a niche feature but as a resilience tool, allowing transactions to continue during network outages, cyber incidents or broader disruptions. Privacy, meanwhile, is positioned as essential to preserving trust in public money in a digital age.
A tougher macro-financial backdrop
These arguments sit against a darker macro-financial backdrop outlined the same day in Madrid by Luis de Guindos, Vice-President of the ECB. He described a world marked by rising trade barriers, weakened multilateral rules and persistently high geopolitical risk.
While inflation in the euro area has stabilised around the ECB’s 2% target and growth has proven more resilient than expected, de Guindos warned that uncertainty is weighing on investment, consumption and financial markets. Asset valuations remain stretched, non-bank financial institutions show liquidity and leverage vulnerabilities, and fiscal pressures are mounting in several advanced economies.
In this environment, the ECB sees robust public infrastructure, including in payments, as a stabilising force. Digital public money is implicitly framed as a complement to regulatory and supervisory efforts aimed at containing systemic risk.
Why this matters for the digital euro debate
The significance of this messaging lies in its timing. Legislative negotiations on the digital euro regulation are ongoing in Brussels, with scepticism in some member states about the project’s necessity and risks. By embedding the digital euro within a wider narrative of European resilience and strategic autonomy, the ECB is strengthening its political case.
Rather than selling the digital euro as a technological upgrade, the central bank is arguing that not having a digital form of public money could itself become a strategic liability. Dependence on foreign payment systems, exposure to private sector incentives and reduced policy control are framed as long-term risks that Europe can still mitigate.
At the same time, the ECB continues to stress that it cannot proceed alone. A digital euro will launch only if lawmakers approve the legal framework and if design choices, including holding limits and distribution via banks, address financial stability concerns.
The message to policymakers is subtle but firm. In a world of higher geopolitical tension and economic fragmentation, maintaining public control over core monetary infrastructure is no longer optional. The digital euro, in the ECB’s telling, is becoming part of Europe’s economic defence strategy.
Related: ECB Digital Euro User Research Highlights Offline Payments, Lower Fees and Trust as Adoption Drivers