How to explain (and make attractive) the digital euro

BarcelonaThe digital euro project has been on the lips of all European institutions for years. Ever since it was proposed in 2020, the European Central Bank (ECB) argued for its implementation, both to speed up payments between states in an increasingly digitized environment and to strengthen the strategic independence of the European Union. But six years later, public ignorance of the project remains high. According to a survey by the Foundation of Savings Banks (Funcas) published in February, only one in four Spaniards understands what it consists of.

One of the similes that works best is Bizum"The goal is for citizens to leave with a clear idea of what it is, how to use it, and what advantages it brings," explains the Bank of Spain's payment systems expert, Esther Barruetabeña. One of the most effective analogies is Bizum, the platform developed by Spanish banking that allows immediate money transfers without relying on foreign companies. "The fact that Bizum is so well-known and used greatly facilitates the understanding of the digital euro: the digital euro will also involve having a single European account [...] and it can be linked to the phone," comments the director of the Bank of Spain's branch in the Catalan capital, Luis Expósito.

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The European Commission's regulatory proposal to promote the digital euro – it is the institution responsible for taking the first step to get the whole machinery going – was unveiled in the summer of 2023. In essence, the text must authorize the ECB to issue digital money, just as it does with physical money. Over the past few years, the various central banks of the EU have jointly moved towards consolidating the project, as have the member states, which in December 2025 adopted a position on the digital currency and the role of cash.

However, interinstitutional negotiations are still stalled in the European Parliament, which has yet to set its position. In this regard, from the Bank of Spain, they urge the representatives of the Eurochamber to unblock the file as soon as possible. "To be able to issue digital euros, we need the regulation," claims Barruetabeña. "We are trying to move forward as quickly as possible because the project is of great scope [...], but we depend on Brussels, and things are not as fast as we would like," he laments.

Differences with stable cryptocurrencies

The digital euro is the main project championed by the ECB in an increasingly digitized financial environment. Its implementation, however, will have to wait at least until 2029, a date by which the monetary authority is confident it will be ready for issuance, pending an agreement between European co-legislators - the European Parliament and the Council of the EU - during 2026.

Given these deadlines, private entities have opted for another route and have promoted stable cryptocurrencies, also known as stablecoins. The digital euro and these new products have their differences, both in terms of who can issue them and their possible uses.

With the digital euro, the debtor will be the ECB, which has the capacity to issue currency and cannot go bankrupt. It is the electronic equivalent of banknotes and coins. In general, so-called central bank digital currencies (CBDCs). They are like a banknote on a mobile phone, which will be used more for shopping or paying for a coffee and daily expenses, and will have a limit that could be 3,000 euros per day to avoid the flight of traditional deposits and financial instability.

For its part, stablecoins emerged, cryptocurrencies linked to an asset, such as the euro, which are dominated by private entities that may have liquidity problems unlike the ECB, although the most reliable ones are subject to European regulation on crypto-assets (MiCA). They are cryptocurrencies like bitcoin, but, unlike it, they are linked to an asset like the euro to avoid abrupt changes in value. It would be the equivalent of a voucher or an available balance. They are intended more for companies than for individuals, who already have Bizum. In Europe, the Qivalis consortium was established, which includes 37 financial entities from fifteen countries, seven of which are Spanish (CaixaBank, BBVA, Sabadell, Bankinter, Abanca, KutxaBank and CecaBank).

The market for stablecoins, which in 2024 was around 160 billion dollars, today exceeds 300 billion. Its daily and annual transaction volume has surpassed that of a network like Visa. Hence the concern of regulators. In general, the currently existing stablecoins which can also be linked to commodities or other cryptocurrencies among other assets, are promoted by private companies, such as Tether (USDT), the main one, or Circle (USDC).