By introducing the digital euro, we want to make our single currency, the euro, fit for the future, said Bundesbank President Joachim Nagel at “Bundesbank Spotlight” in Berlin, addressing an audience of around 200 guests. This new event format is designed as a way for the Bundesbank to engage in personal dialogue with experts and guests from the spheres of politics, economics, academia and society about current topics relating to monetary and economic policy. We want to develop the digital euro together with consumers, banks, retailers and policymakers, he stressed. Professor Nagel discussed the benefits of the digital euro with Ramona Pop, Executive Director of the German Federation of German Consumer Organisations, and Christian Sewing, CEO of Deutsche Bank and President of the Association of German Banks. 

“Win-win situation” for the payment market

One of the topics Professor Nagel talked about with Mr Sewing was the interplay between the digital euro and private sector payment solutions. According to the Bundesbank President, they can benefit from each another: the digital euro could function like a motorway on which providers of private solutions are also able to travel. 

According to Professor Nagel, the digital euro will also be a cost-effective alternative to existing digital means of payment and will stimulate competition in the payments market: “This is another reason why the retail sector is very open to the digital euro”. 

Mr Sewing said that the digital euro needs to meet certain requirements in order to establish itself successfully. For example, it needs acceptance and must be integrated into the existing payment infrastructure. He also stressed that he is much more positive about the digital euro today than he was 18 months ago.

“Simple, secure and European”

As a European payment solution, the digital euro would strengthen Europe’s strategic autonomy by making payments less dependent on US corporations. For instance, Visa and Mastercard currently account for almost two-thirds of all card payments in the euro area. Payments are part of our critical infrastructure. And we really ought to stand on our own two feet when it comes to critical infrastructure, Professor Nagel emphasised, adding that this is absolutely essential in view of current geopolitical developments. 

Privacy is a priority

Bundesbank President Nagel explained that consumers do not have to worry about the security of their data: Privacy has been a top priority of the digital euro project since its inception. 

In an interview with Ms Pop, he discussed data privacy for the digital euro compared with that of existing non-European payment providers. Professor Nagel assured in his speech that the Eurosystem will not be able to tell who is behind individual payments. Moreover, it will not be able to and does not want to control what users pay for with the digital euro. 

From the consumer’s perspective, Ms Pop said that the digital euro must first and foremost be safe and easily accessible, stressing the importance of data privacy, user-friendliness and freedom of choice.

Digital euro project: current status

Bundesbank President Nagel said that in 2029 he wants to use the digital euro to pay for his Christmas presents. In the current project phase, the Eurosystem is preparing to be able to issue the additional means of payment in the course of 2029. We assume that the legal framework for the digital euro will be in place by the end of this year, said Professor Nagel. The legal basis is a prerequisite for the Eurosystem to be able to start issuing the digital euro.