A strategic perspective
The European Central Bank is moving from theory to execution on the Digital Euro, a central bank digital currency designed as a euro-backed, risk-free digital means of payment for everyone in the euro area, not to replace cash, but to complement it and
strengthen Europe’s monetary sovereignty. Banks will not be sidelined: they are expected to act as intermediaries, manage onboarding and wallets, integrate the Digital Euro into their services, and build new value-added offerings. The project
is now in its preparation phase (2023–2025), with a possible launch as early as 2026.
For a broader perspective on what a digital euro could mean for banks and citizens, Sopra Steria’s insight The Digital Euro: Reinventing Money, Redefining Banking explores the implications.
What the digital Euro is and what it isn’t
The Digital Euro is envisioned as a central bank digital currency (CBDC): a digital form of cash issued by the ECB and accessible to the public in the euro area. This is meant to complement, not replace existing payment solutions and physical cash, while
it differs in key ways from existing forms of money:
- Unlike commercial book money, the Digital Euro would be risk-free, backed directly by the ECB.
- Unlike cryptocurrencies and most stablecoins, it would be regulated, non-speculative, and legally recognized as legal tender.
The goal is not to replace cash, but to provide a complementary digital payment solution for the eurozone—reliable, accessible, and sovereign.
Also, the Digital Euro is not intended to disrupt the role of commercial banks. It will not be programmable in a way that restricts how users can spend their money. Its purpose is to enhance choice and resilience in the European payment ecosystem –
not to disintermediate the financial sector.
ECB’s objectives: Sovereignty, Innovation, Resilience
The ECB is pursuing the Digital Euro not for novelty’s sake, but as a response to structural shifts in payments and monetary policy. Its aims are clear: strengthen Europe’s strategic autonomy in payments. There is a heavy reliance on non-European
card schemes for in-store payments. This dependency poses risk to monetary sovereignty, especially in a world where digital payments are increasingly dominated by global tech firms.
The Digital Euro is not just a response to today’s vulnerabilities, but aims to:
- Strengthen monetary sovereignty by reducing dependence on foreign-dominated payment networks and providing a public digital payment option under European governance.
- Foster innovation and competition in digital financial services by enabling new services and business models through open infrastructure.
- Ensure payment resilience, especially in times of crisis or infrastructure disruption by offering a fallback.
The ECB views the Digital Euro as a strategic asset in an increasingly digital, geopolitical economy.
The role of banks: more than technical intermediaries
Banks are not being sidelined—they are expected to serve as intermediaries in distributing the Digital Euro. Their potential responsibilities include:
- Handle onboarding, identity verification and AML compliance
- Provide wallets and use customer interfaces for consumers and merchants
- Offer customer support and guidance to ensure a smooth user experience and build trust in the Digital Euro
- Integration of the Digital Euro into existing banking platforms and services
Beyond infrastructure, banks will be the face of the Digital Euro for end users and therefore should seize this opportunity to build revenue streams around the digital Euro. Early and strategic positioning presents an excellent opportunity to co-create
innovation rather than chase it and fall behind. Banks could define value-added services: embedding the Digital Euro into loyalty programs, funding credit service, smart contracts, or business ecosystems. It is not just about enabling payments—it’s
about securing relevance!
Timeline and project status
The final decision on issuance is still pending, but the direction is clear: the euro is going digital. The ECB completed its two-year investigation phase in 2023 and entered the preparation phase in November 2023, which still runs until late 2025.
- 2023: End of the investigation phase.
- Nov 2023 - late 2025: Preparation phase led by the ECB.
- 2024-2025: Development of the Digital Euro rulebook for interoperability, privacy, and user experience.
- 2024-2025: Vendor selection for infrastructure and wallet solutions. Key providers have already been chosen.
- Extensive testing and stakeholder engagement with banks, merchants, and consumers.
- The final decision will be made after the EU legislative process, likely late 2025 or early 2026. Earliest launch: 2026.
The project is no longer theoretical. We are now firmly in the design and decision-making stage.
Why banks must act now
The Digital Euro is more than a regulatory requirement; it’s a strategic inflection point. Banks that wait risk being reduced to technical processors in a value chain they once led. Inaction is not an option.
To act strategically, banks should:
- Monitor regulatory developments and participate in ECB consultations
- Conduct internal readiness assessments for integration with core banking systems, APIs and compliance frameworks
- Identify customer segments and use cases to define their role in the ecosystem
- Align digital and payments strategy with future CBDC models
- Explore new revenue streams and business models such as value added services or digital identity
Banks are uniquely positioned to build trust in the Digital Euro, if they act early. Those who prepare early will shape the rules of engagement. Those who wait may simply have to follow them. Align strategy with Sopra Steria’s white paper Stablecoins, Digital Euro: Which currency for tomorrow’s finance?.
Final thoughts
The introduction of a Digital Euro is not just a technical evolution, it’s a monetary and strategic transformation to future-proof Europe’s monetary system. It offers banks the chance to reaffirm their role as trusted intermediaries or risk
ceding ground to new players. As the ECB moves forward, banks must move with it—not later, but now. Now is the time to join the conversation, engage with regulators and start building. The Digital Euro is coming. Will you be ready?
If you’re evaluating CBDC opportunities, explore our offer here and see how, together, we can turn vision into value.
FAQ
What is the point of a digital euro?
The Digital Euro is meant to strengthen Europe’s strategic autonomy in payments, reduce dependence on non-European payment networks, and ensure resilience in times of crisis. It provides a reliable, accessible, sovereign digital payment option under
European governance.
Is digital euro a cryptocurrency?
The Digital Euro is a central bank digital currency (CBDC), regulated and directly backed by the European Central Bank, legally recognized as euro, and not a speculative crypto asset.
How to use digital euro?
People and merchants in the euro area would access and use the Digital Euro through banks, via wallets and payment interfaces integrated into existing banking services. It’s designed to work like digital cash for everyday payments.
Is digital euro replacing cash?
Its goal is not to replace cash but to complement physical cash and existing payment solutions by offering a digital public alternative for the eurozone.
Who controls the digital euro?
The Digital Euro would be issued and backed by the European Central Bank, with commercial banks acting as intermediaries for onboarding, wallets, and customer support.
Can you invest in digital euros?
The Digital Euro is regulated, non-speculative central bank money. It’s meant to be used as money, not as an investment product.
Is the digital euro safe?
It is described as risk-free because it’s directly backed by the ECB, and it is designed to be stable, regulated, and trusted by citizens and merchants across the euro area.