ECB Reassures MEPs: Digital Euro Will Be Profitable for Banks
Brussels — The European Central Bank is pressing ahead with plans for a digital euro, assuring lawmakers that the initiative will not only complement cash but also remain financially viable for banks and payment service providers, reported by Euro News.
Addressing the European Parliament’s economic affairs committee on Thursday, ECB board member Piero Cipollone emphasized that the digital euro, if launched, would “profit-making” rather than a burden. He described assumptions that it could be loss-making as speculative, adding that uptake would likely be modest enough to maintain financial stability while still signaling sufficient demand to justify infrastructure costs and compensate providers.
Estimates from the European Commission suggest integrating a digital euro across the eurozone would cost between €2.8 and €5.4 billion — figures Cipollone defended as credible, dismissing reports of significantly higher projected costs. “We have seen numbers six, ten times higher than that. The credibility of such figures can be questioned,” he said.
Publicly issued, the digital euro would be free for consumers, yet to motivate banks and other intermediaries, the ECB is exploring compensation models to cover costs and ensure equitable incentives.
The digital euro is designed to act as a modern backup to cash. Cipollone noted the rapid decline in cash usage across the euro area — from 68% to 40% of transactions in just five years, with a decline in transaction value from 40% to 24%. In an era of cyberattacks and geopolitical uncertainty, he stressed that a reliable public payment option is as essential as electricity or clean water.
Despite progress, the project faces hurdles in the European Parliament and member states. Former rapporteur Stefan Berger’s draft report has yet to be voted on, and his successor, Spanish MEP Fernando Navarrete, has questioned whether a retail digital euro addresses Europe’s most pressing payment challenges. Navarrete favors exploring a wholesale CBDC and urges the ECB to act as a neutral enabler rather than a driver.
Other contentious issues include privacy safeguards, bank compensation, distribution mechanisms, potential caps on holdings, and the impact on non-euro countries. EU finance ministers are expected to work toward a common stance by the end of 2025, but Cipollone’s remarks signal that the ECB is determined to push the digital euro forward as both a safeguard for citizens and a strategic evolution of Europe’s monetary infrastructure.
