In a letter to a Member of the European Parliament, European Central Bank President Christine Lagarde set out the ECB’s view that a digital euro would complement cash by giving euro area citizens access to central bank money in digital form, while providing an additional European option for electronic retail payments across the region. The letter links the project to greater resilience in retail payments and to reducing dependence on non-European payment providers, and notes that the ECB is prepared to support the European Commission’s efforts to foster a more competitive European payments market. The ECB cited evidence of a continuing shift away from cash, including its 2024 consumer payments study showing online payments at 21% of day-to-day payment volume and 36% of value, and point-of-sale card payments (45%) exceeding cash (39%), with mobile devices at 7%. It also highlighted concentration in card payments, with international card schemes accounting for 64% of electronically initiated card transactions using euro area-issued cards and 13 of 20 euro area countries relying on them entirely due to the absence of a national card scheme, alongside reports that smaller retailers face charges three to four times higher than larger ones; the European Court of Auditors is cited as finding gaps in reliable card payment data linked in part to non-disclosure agreements. The letter argues that the digital euro’s envisaged legal tender status under the proposed regulation would expand opportunities for payment service providers and reduce the cost of scaling solutions across Europe, and notes around 100 applications to the ECB’s call for expressions of interest in digital euro innovation partnerships. The ECB indicated it will provide technical support for legislative discussions, with ECB staff and Piero Cipollone available to engage with the negotiating team, and will continue to keep the European Parliament’s ECON Committee updated through regular appearances and website updates.
European Central Bank 2025-01-31
European Central Bank outlines how a digital euro could strengthen competition and reduce reliance on international card schemes
ECB President Christine Lagarde stated that a digital euro would complement cash, enhance retail payment resilience, and reduce reliance on non-European providers. The ECB's 2024 study shows a shift from cash to electronic payments, dominated by international card schemes. The digital euro's legal tender status aims to expand opportunities for payment service providers and lower costs, with the ECB supporting legislative discussions and innovation partnerships.