ContextVideo message by the Bundesbank President to the International Bankers Forum conference on payments and banking.
Why it mattersThe Bundesbank President explains why the digital euro matters for Europe's payment sovereignty and presents the Pontes settlement project.
- Europe depends on others in critical areas such as payments.
- New digital payment solutions raise regulatory and stability questions.
- Europe must stay able to act in a crisis.
- Launch the digital euro to protect payment sovereignty.
- Develop the Pontes project for wholesale settlement in central bank money.
- Let Europe actively shape global digital payment standards.
Read the speech summary
1. Central bank money in the digital age
Speaking by video to a European payments conference, Bundesbank President Joachim Nagel argued that the digital euro answers three developments. First, payments are digitalising: cash fell from almost half to two fifths of point-of-sale payment value between 2019 and 2024, online purchases doubled in value share to 36%, and shops not accepting cash tripled to 12%. The digital euro would complement cash, keeping central bank money, the anchor of the monetary system, available to everyone in digital form as legal tender. The Eurosystem would provide basic public infrastructure and common standards while banks and payment firms remain the interface with customers and build services on top, such as conditional payments like an automatic insurance payout. To protect financial stability and bank lending, there will be holding limits and no interest, with larger payments covered by a waterfall from a linked bank account; it is a means of payment, not an investment.
2. Sovereignty and privacy
Second, payments are critical infrastructure and Europe depends on non-European providers: more than two thirds of euro-area card payments run on non-European systems, and 13 of 21 euro countries lack a national solution. Convenience must not come at the expense of the ability to act in a crisis. The digital euro would be an autonomous European base infrastructure, not isolation. Privacy is a design requirement: the Eurosystem sees only pseudonymised holdings and cannot build individual profiles, and the offline mode, phone to phone, gives privacy almost like cash.
3. Europe's place in digital finance
Third, the euro's role, as second international currency with inflation averaging about 2% since launch, depends on modern infrastructure. The digital euro is one block in a broader payments strategy, which also includes the wholesale Pontes project for settlement in central bank money on distributed ledgers, and Europe should help shape standards and rules for tokenised markets and stablecoins. He stressed that central bank money and private solutions have long coexisted and complement each other, that the digital euro must not be built against the financial sector, and that its design is meant to fit the existing financial system. He ended with an appeal to turn the digital euro into a shared undertaking with banks and payment firms, whose critical objections will help refine it.