The Central Bank of Latvia published an analysis of the digital euro project, framing it as a way to reduce the euro area’s reliance on non-European card payment schemes and to strengthen competition and resilience in digital payments. The piece also reports mixed public sentiment in Latvia, with a February 2025 survey showing limited stated willingness to adopt a digital euro. The article points to Visa and MasterCard’s dominance in Latvia and notes that 13 of the 20 euro area Member States lack local alternatives, while another seven have solutions that struggle to compete with global players and scale cross-border. It argues that concentrated market power has contributed to higher merchant costs, citing an example where merchant fees for accepting card payments doubled between 2018 and 2022 and where small merchants may face acceptance fees three to four times higher than large retail chains. A digital euro is described as a free-to-use public means of payment for consumers that could broaden choice for merchants and users, support private payment service providers in offering euro area-wide services, and improve crisis resilience, including through offline functionality and the ability for users to switch providers if one becomes unavailable. The European Commission’s proposed regulation is described as seeking legal tender status for the digital euro and establishing acceptance standards to enable a more cohesive European payment network. Survey results reported are 26% intending to use the digital euro, 32% undecided, and 42% not intending to use it, with “insufficient information” and distrust of technology among the main deterrents. On process and timing, the project is described as proceeding in two-year phases, with the European Central Bank’s Governing Council assessing completion of each phase before deciding whether to proceed. The final issuance decision is presented as contingent on approval of the relevant EU regulation, which is still being developed, and the article indicates that practical availability for individuals and businesses would unfold over several years.
Central Bank of Latvia 2025-04-01
Central Bank of Latvia reviews digital euro project as survey shows only 26% of Latvians intend to use it
The Central Bank of Latvia's analysis of the digital euro project highlights its potential to reduce reliance on non-European card schemes and enhance competition in digital payments. The report notes Visa and MasterCard's dominance in Latvia, with high merchant fees and limited local alternatives. A digital euro could offer a free public payment option, improve crisis resilience, and support euro area-wide services, though public sentiment in Latvia shows mixed willingness to adopt.