Economists Urge European Parliament to Support Public Interest in Digital Euro
According to Cointelegraph, a group of seventy economists and policy experts has urged Members of the European Parliament (MEPs) to endorse a digital euro that prioritizes public interest. They argue that such a move is essential for maintaining Europe's monetary sovereignty and ensuring access to central bank money in an increasingly cash-light economy. The open letter, titled “The Digital Euro: Let the public interest prevail!” and published on Sunday, warns that without a robust public option, private stablecoins and foreign payment giants could further dominate Europe's digital payments landscape.
The signatories, including José Leandro, former executive board director for the European Union at the European Bank for Reconstruction and Development (EBRD), and French economist Thomas Piketty, describe the proposed central bank digital currency (CBDC) as a public good. They advocate for a euro area-wide digital payment method, issued by the Eurosystem, that is free of charge for basic services and complements rather than replaces cash. The letter cautions that if the EU delays or dilutes the project, European citizens and merchants may become increasingly reliant on private, predominantly non-European card schemes and large technology payment platforms, potentially undermining the resilience and autonomy of Europe’s payment system during times of stress.
The intervention comes as the European Central Bank (ECB) is in the preparation phase of the digital euro project, focusing on developing a rulebook, technical architecture, and offline functionality before making any final issuance decisions. The ECB envisions the digital euro as a public, pan-European payment solution that provides cash-like access to central bank money, including offline payments, while maintaining financial stability through mechanisms like holding limits and tiered remuneration. In a speech on January 9, ECB executive board member Philip Lane emphasized that the project aims to balance innovation, privacy, and the continued role of banks as intermediaries in the retail payment system.
Despite the potential benefits, the digital euro project has faced skepticism from commercial banks and some policymakers concerned about possible disintermediation of deposits, operational costs, and uncertain user adoption. Consumer surveys indicate that robust privacy protections are crucial for public acceptance of a digital euro. Analysts at BNP Paribas have also noted that the advantages of a digital euro must be weighed against potential funding and profitability pressures for banks, depending on the setting of holding limits and remuneration. In response to Cointelegraph’s inquiries, the ECB declined to comment directly on the economists’ letter but referenced several recent studies. One technical annex examines the financial stability impact of a digital euro with individual holding limits set at 3,000 euros, concluding that no financial stability concerns arise even in adverse scenarios. Another report evaluates how a digital euro would integrate into the existing payment ecosystem, while separate papers explore privacy safeguards and the investment costs for the euro area banking sector.
