Digital Euro: 70 Economists Issue Urgent Plea to EU to Protect Public Interest and Sovereignty

In a decisive move for Europe’s financial future, seventy prominent economists and policy experts have issued an urgent, collective plea to European Union lawmakers. They are demanding that the proposed digital euro must unequivocally serve the public interest to safeguard the bloc’s monetary sovereignty from the rising influence of private stablecoins and foreign payment giants. This intervention, detailed in an open letter published on Sunday, January 12, 2025, strikes at the heart of a critical debate as the European Central Bank (ECB) advances its preparation phase for a central bank digital currency (CBDC).

Economists Champion Digital Euro for Public Good

The open letter, titled “The Digital Euro: Let the public interest prevail!”, represents a significant consolidation of expert opinion. Consequently, the signatories argue that a well-designed digital euro is not merely a technological upgrade but an essential public good. They emphasize its crucial role in guaranteeing universal access to central bank money as physical cash usage declines. Furthermore, the economists envision this digital currency as a public, euro area-wide payment method. It would be issued directly by the Eurosystem and remain free of charge for basic user services, explicitly designed to complement rather than replace physical cash.

The coalition includes authoritative figures such as José Leandro, former executive board director for the EU at the European Bank for Reconstruction and Development, and renowned French economist Thomas Piketty. Their collective expertise underscores the letter’s gravitas. They present a clear warning: hesitation or a diluted digital euro project would cede ground. European citizens and merchants would then become increasingly dependent on private, often non-European, card schemes and big tech payment platforms.

The Sovereignty Stakes in Digital Payments

This dependency, the experts caution, poses a direct threat. It could weaken the resilience and autonomy of Europe’s entire payment system, especially during periods of economic or geopolitical stress. The letter frames the digital euro as a foundational pillar for maintaining strategic autonomy in an increasingly digital and fragmented global financial landscape. Therefore, the initiative transcends simple payment efficiency; it is fundamentally about control over the monetary system itself.

ECB’s Design Balances Innovation and Stability

The economists’ intervention arrives at a pivotal technical juncture. Presently, the ECB is deep within its preparation phase for the digital euro project. This phase involves meticulous work on a comprehensive rulebook, selecting the optimal technical architecture, and developing reliable offline functionality. These steps are prerequisites before the Governing Council makes any final decision on actual issuance.

The ECB’s published design principles aim to create a careful equilibrium. Executive Board member Philip Lane reiterated this balance in a January 9 speech. The digital euro seeks to foster innovation and ensure strong privacy protections while deliberately preserving the vital intermediary role of commercial banks in the retail payment ecosystem. According to the ECB’s framework, the digital euro would function as a public, pan-European payment solution. It would offer cash-like attributes, including the capacity for offline transactions.

To maintain financial stability, the design incorporates specific safeguards:

• Holding Limits: Individual wallets would have a maximum balance, likely around 3,000 euros, to prevent large-scale disintermediation of bank deposits.
• Tiered Remuneration: Holdings above a certain threshold might not earn interest, or could earn a lower rate, to avoid becoming a dominant savings vehicle.
• Anti-Money Laundering (AML) Compliance: The system would integrate necessary controls while striving to protect user privacy for low-value transactions.

The ECB has proactively analyzed potential impacts. One technical study concluded that with a 3,000-euro holding limit, no financial stability concerns would arise, even under adverse economic scenarios. Separate reports have examined privacy safeguards, integration with existing payment systems, and the associated investment costs for banks.

Navigating Skepticism and Privacy Demands

Despite the supportive economic argument, the digital euro project faces substantial headwinds. Commercial banks have expressed consistent skepticism. Their primary concerns revolve around the risk of deposit disintermediation, which could pressure their funding bases and profitability. Additionally, banks worry about the operational costs of integrating with the new system and the uncertainty of consumer adoption rates.

Simultaneously, consumer acceptance remains a significant hurdle. Public surveys consistently identify robust privacy protections as a non-negotiable condition for widespread adoption. Citizens are wary of a state-issued digital currency that could enable unprecedented transaction surveillance. Analysts at major institutions like BNP Paribas have echoed these concerns. They highlight that the net benefits of a digital euro must be carefully weighed against the potential funding and profitability pressures on the banking sector, which are highly sensitive to the final settings for holding limits and remuneration.

The following table contrasts the key perspectives in the digital euro debate:

The Stablecoin Context and MiCA Regulation

The economists’ warning about private stablecoins is not made in a regulatory vacuum. The EU’s Markets in Crypto-Assets (MiCA) regulation, now fully in force, establishes a comprehensive framework for stablecoin issuers. However, the letter suggests that regulation alone may not be sufficient to protect strategic interests. Even regulated stablecoins, if issued by large foreign corporations, could channel significant transactional data and economic influence outside EU oversight. The digital euro, therefore, is positioned as a sovereign public alternative within this newly regulated landscape. Interestingly, the ECB itself has noted that current stablecoin risks in Europe appear minimal, largely due to low adoption levels under the nascent MiCA regime.

Conclusion

The forceful appeal from seventy economists has significantly raised the stakes for the EU’s digital euro project. It frames the upcoming decisions by the European Parliament and the ECB not as mere technical choices, but as a definitive test of the bloc’s commitment to monetary sovereignty and the public interest in the digital age. The path forward requires navigating a complex triangle of demands: ensuring the digital euro is attractive and private enough for public adoption, safe enough for financial stability, and sovereign enough to fulfill its strategic purpose. As the ECB’s preparation phase continues, the debate ignited by this letter will undoubtedly shape the design, governance, and ultimate success of Europe’s ambitious leap into digital currency.

FAQs

Q1: What is the main argument made by the 70 economists in their open letter?
The economists argue that the EU must develop a digital euro that prioritizes the public interest to protect Europe’s monetary sovereignty. They warn that failure to provide a strong public digital payment option will leave citizens and businesses dependent on private, often foreign-controlled, stablecoins and payment platforms, undermining strategic autonomy.

Q2: How does the European Central Bank plan to prevent the digital euro from harming banks?
The ECB’s design includes key safeguards like individual holding limits (e.g., 3,000 euros) and tiered remuneration. These measures aim to prevent the digital euro from becoming a dominant form of savings, thereby minimizing the risk of large-scale deposit outflows from commercial banks and preserving their role as financial intermediaries.

Q3: What are the biggest public concerns about adopting a digital euro?
The primary public concern is privacy. Surveys indicate that strong, legally-guaranteed privacy protections, similar to those for cash transactions, are a critical precondition for widespread consumer acceptance. People are wary of excessive transaction surveillance by authorities.

Q4: How would a digital euro be different from a private stablecoin like USDC or a payment app like PayPal?
A digital euro would be a direct liability of the Eurosystem (the ECB and national central banks), making it risk-free central bank money, similar to cash. Private stablecoins are liabilities of private companies and carry credit risk. Unlike commercial payment apps, a public digital euro would be a foundational public infrastructure, designed for universal access and strategic autonomy, not profit.

Q5: What is the current status of the digital euro project?
The project is currently in a multi-year “preparation phase.” The ECB is developing the rulebook, technical specifications, and testing offline functionality. A final decision on whether to actually issue a digital euro will be made by the ECB Governing Council only after this phase concludes and the EU’s legislative framework is fully adopted.