A high-level international conference at Eesti Pank discussed how the planned digital euro will help in the near future with payments that are critical for the European economy. A digital means of payment that is controlled by the European Union will become increasingly important as cash is used less and less and geopolitical strains highlight the importance of strategic independence. It was noted that the environment is ready for a digital form of legal tender to be launched into circulation.

The keynote speakers at the conference, Valdis Dombrovskis of the European Commission and Piero Cipollone from the Executive Board of the European Central Bank, both observed that people’s payment behaviour has changed rapidly in recent years. The use of cash has dropped sharply, as its use for payments in points of sale fell in 2019–2024 from 72% to 52%. The consequence of this was increased dependence on non-European service providers because Europe has not yet managed to create its own digital means of payment that would be accepted equally across the whole euro area. Private sector initiatives have been limited at best to the regional level. “Today, the space left behind by declining cash use is being largely covered by non-EU payment solutions”, said Mr Dombrovskis.

Thirteen countries in the euro area, including the Baltic states, do not have any alternative to the non-European service providers for everyday payments by bank card. Increasing global tensions are however making it increasingly evident how dangerous it is for critical areas, which include the operation of payments within the economy, to depend only on the decisions and commitment of external providers. The dependency also restricts competition, leading to higher prices for both merchants and consumers. “The digital euro can help to counter these risks by ensuring that the euro area retains control over its financial and payments infrastructure”, said Mr Dombrovskis. He emphasised that the digital euro would enter circulation to complement and not replace cash.

The digital euro is essentially cash in digital form. “As payments become increasingly digital, central bank money must evolve to keep pace and remain an option for the people of Europe”, said Mr Cipollone. “The digital euro offers a digital form of the very same cash that we all use every day”, he continued, adding that it would be a European solution based on European infrastructure. The digital euro would not only strengthen European autonomy, it is also designed to be as secure as possible in a crisis so that digital payments could continue even in the face of very serious threats or interruptions. The infrastructure is intended to be as resistant as possible to cyber attack, with back-up solutions to cover any problems at service providers, and capacity for people to pay with the digital euro even if there is no internet connection or if there is an interruption to the payment services of the banks.

The opening speeches were followed by panel discussions featuring market participants and political leaders that discussed in greater depth the opportunities and risks of launching the digital euro into circulation. A very important feature of the digital euro is its greater resilience to interruptions and stoppages in the payment services of banks, as it would still be possible to pay with the digital euro in any such event. There was discussion of the new opportunities for innovation that the infrastructure being developed for the digital euro is creating, and the faster growth that could result for companies in the European financial sector.

The final decision to introduce the digital euro into circulation has not yet been taken. The legal basis that is needed for it is under discussion in the European Parliament and at the Council. Those discussions could be finished by the end of next year, after which the Governing Council of the European Central Bank can take the decision to launch the digital euro into circulation.

For more information:

• Photographs from the conference taken by Arno Mikkor can be found on the Eesti Pank Flickr account
• Remarks by Commissioner Dombrovskis at the Baltic digital euro conference
• Keynote speech by Piero Cipollone, Member of the Executive Board of the ECB
• Recordings of the conference:

Additional information:
Hanna Jürgenson
Communications Specialist
Eesti Pank
Tel: 5692 0930
Press enquiries: [email protected]