Valdis Dombrovskis has told the European Parliament’s Economic and Monetary Affairs Committee that the digital euro will enhance Europe’s monetary sovereignty and modernize payments across the euro area, without replacing cash or displacing banks.
The European Commission Executive Vice-President began by highlighting the changes in payment behavior across the EU. The share of cash payments at point of sale in the euro area has declined from 72 percent in 2019 to 52 percent in 2024. Dombrovskis warned that Europe must respond or risk falling behind global competitors.
Digital euro as a public payment option available across the eurozone
“A digital euro — securely issued and backed by the European Central Bank — offers the potential to modernise our payment systems, strengthen the global role of the euro, improve financial inclusion, and reinforce monetary sovereignty in the digital age,” he said.
The Commission’s proposal, currently under discussion with EU lawmakers, positions the digital euro as a public payment option available across the eurozone. Dombrovskis outlined several features that distinguish the project: seamless use across all member states, 24/7 instant settlement, offline payment capability, and reduced merchant fees.
He stressed the strategic rationale behind the project. “Today, the space left behind by declining cash use is being covered by non-EU payment solutions. We simply cannot afford to cede technological control over the EU’s economy entirely to others.”
Dombrovskis added, “As other nations develop and promote alternative digital currencies for international trade, the EU must act to ensure that the euro enhances its role as a strategic reserve currency.”
He said the digital euro could help shield the European economy from dependencies on foreign-denominated assets and infrastructures. “The digital euro can be an important pillar in strengthening the EU’s strategic autonomy by increasing the euro’s resilience vis-à-vis other currencies, payment systems, third country Central Bank Denominated Currencies and ‘stablecoins’ not denominated in euro.”
Addressing concerns from banks and payment providers, he underlined that the digital euro will complement—not compete with—private sector solutions. “The policy choice is not whether we promote private payments or the digital euro, but how we can foster both – as they complement each other in achieving our policy objectives, especially the autonomy of European retail payments.”
He added that open access standards will allow payment providers to build products on top of the digital euro and expand their services across EU borders. He also stated that banks’ core functions would be preserved through design features such as holding limits, which aim to prevent digital euro accumulation that could threaten financial stability.
Dombrovskis responded directly to privacy concerns, saying, “Guaranteeing citizens’ rights to privacy is one of the fundamental pillars of the Commission’s proposal for the digital euro. The digital euro will provide cash-like privacy in the digital world for offline payments and a high degree of privacy for online payments. This will ensure that central banks can never identify users.”
He said the proposal attempts to balance privacy protections with the need to address money laundering, terrorism financing, and fraud.
On fears that the digital euro might lead to the erosion of cash, he said both will co-exist. “The digital euro will be an additional choice for consumers. It will complement and not replace cash.”
He noted that the Commission had proposed a regulation on the legal tender status of euro cash in parallel with the digital euro legislative proposal. “Both proposals make it clear that people will have the choice to pay in euro banknotes and coins or in digital euro.”
He closed by emphasizing the accessibility goals of the project. “Our legislative proposal includes a number of requirements to ensure accessibility for unbanked people, people with disabilities, functional limitations or limited digital skills.”
Dombrovskis concluded, “The digital euro has the potential to provide a pan-European means of payment that is widely available and accepted throughout the euro area. This will, in turn, promote innovation and competition, while offering an extra choice that complements cash and private payments.”
