Banks and the ECB need to explore together the needs to be addressed by a digital euro and its design to ensure financial sovereignty for Europe and added value for its citizens.

Digital transformation is a reality in payments: competitive pan-European payment solutions emerge, as do private global stablecoin initiatives and increased role of BigTech. Only by working closely together, authorities and banks can successfully harness this transforming environment.



EBF paper #1: Strategic considerations

The EBF takes note of the work that is done by the Eurosystem to investigate a digital euro that could be aimed at a retail audience, should the need arise. A central bank digital euro should first and foremost be a viable and optimal solution to a clearly defined unserviced need in the market, for which no other more efficient solution exists. In addition, it should benefit private individuals and corporates and the economy as a whole, while avoiding destabilizing the financial system. Therefore, before the ECB decides to issue a CBDE, it should be clear what a CBDE can contribute that is not already covered or covered by private payment and deposit solutions.

Taking into account their crucial position in the financial and payment systems, and for the financing of the economy, European banks welcome a continuous exchange with the ECB on the digital euro project. The underlying needs, possible – effective – alternatives under these objectives as well as the design principles should be further explored with representatives of the European society at large. EBF welcomes detailed discussions with sufficient time before a decision on a project launch.

The EBF stands ready to engage with the ECB in conducting additional assessments and applying investigative tools beyond the launched public consultation.

EBF paper #2: Impact on bank funding

A digital euro would need to benefit European citizens and the economy as a whole, while avoiding any destabilizing effect on the financial system. Moreover, in a possible digital euro ecosystem, it should be very clear how private sector payment and deposit solutions would go hand in hand with it.

Reflecting on the idea of limiting digital euro holdings to address negative consequences, in EBF paper #2 we share our views on the possible cyclical and structural disintermediation of bank funding. We also raise questions as to the implications of such disintermediation and the availability of alternative funding sources, while also looking at what this could mean for the role of the ECB itself.

EBF paper #3: How does a digital euro fit the payments landscape?

The digital euro project investigation phase is set to define what a digital euro could actually be and the purposes and use cases it could fulfill. However, it is already clear that a digital euro would impact the European payments landscape. The objective of increased European sovereignty can only be achieved with competitive payment methods offered to the public by European PSPs. One of the main goals of the starting investigation by the ECB should be to define whether a digital euro would support this objective and how in practice it would add value to the EU payments landscape. This would provide a very welcome clarification on how a digital euro will fit Europe’s already existing efficient, secure and well-functioning electronic payments market.

Substantial efforts have been deployed by policy makers and financial industry to create a Single Market for payments up to today. The EBF #3 paper takes a closer look at the expected impact by the digital euro on this Market, and what design aspects are essential to consider in return.

Position papers, Responses and Relevant Documents

Strategic considerations

Impact on bank funding

How does a digital euro fit the payments landscape?

EBF response to European Commission’s Targeted Consultation on a digital euro


Alongside many Central Banks around the world, the European Central Bank is exploring the possibility of issuing Central Bank Digital Currency (CBDC), a digital euro. This work started with the publication of the ECB’s report on a digital euro and the ensuing public consultation.


Report on Digital Euro

While cash is still the dominant means of payment, new technologies and the increasing demand for immediacy from consumers are changing the way European citizens pay. This is evident in the expanding role of fast electronic payments. To ensure that consumers continue to have unfettered access to central bank money in a way that meets their needs in the digital age, the ECB’s Governing Council decided to advance work on the possible issuance of a digital euro – an electronic form of central bank money accessible to all citizens and firms. A digital euro would be introduced alongside cash, it would not replace it Click on the image for the full report.

Eurosystem report on the public consultation
on a digital euro

The ECB report from 2 October 2020 was followed by the “Public consultation on a digital euro”, which was launched on 12 October 2020 and ran until 12 January 2021. This report from April 2021 sets out the results of the analyses of the 8,221 responses submitted by participants in the public consultation. It will serve as an important input for the ECB’s Governing Council when it decides in mid-2021 whether to launch a formal investigation phase in view of a possible launch of a digital euro Click on the image for the full report.

A digital euro would be central bank money made available in digital form for use in retail payments

Source: ECB Report on a digital euro


From Payments to CBDCs: Are we rethinking the financial ecosystem?

Thursday, 18 November 2021



The third Digital Thursday 2021 focused on Central Bank Digital Currencies and payments. The event discussed the phenomenon of CDBC globally and debated on the need for CBDCs for a global financial ecosystem. Experts explored how CBDC issuance would change the role of central banks and the banking system overall, while providing insights on different CBDC projects that are under way.  The event touched on a potential integration of a digital euro into the European payments landscape: how does it fit together with the retail payments strategies of the European Commission and the ECB? And how does it affect the objective to develop ‘homegrown’ pan-European payment solutions and the new instant payments framework in Europe?


Close-up: A digital euro

Thursday, 24 June 2021


Central banks around the world are investigating Central Bank Digital Currencies as a response to the emergence of private stablecoin projects and to meet the needs of an increasingly digitalized economy. In Europe, the ECB is expected to announce soon the continuation of its investigation into a digital euro following a public consultation phase.

For the debate to go forward, it is important to explore in more detail what a digital euro could look like, what could be its features and how it could be best designed to benefit European businesses and citizens. The digital euro project also raises important questions on the role of the banking sector, including the broader role banks would play in a digital euro ecosystem and how they would participate in the design phase.

At EBF Digital Thursday Close-up we discussed these challenges, including what to expect from the next phase of this important new development. Click on the banner above to watch the full recording of the event.

  • Anni Mykkänen, Senior Policy Adviser, Payments & Innovation