Phoenix 24
When paper money fades, sovereignty and privacy must not vanish too.
Brussels, August 2025.
In the euro area, the use of cash is declining at a rapid pace, yet its disappearance may erode the very foundations of public money and financial freedom. Officials at the European Central Bank have therefore proposed the creation of a digital euro, a new form of public currency designed to safeguard the fundamental advantages of cash in a digital environment.
Cash remains simple, private, and universally accessible. Anyone can use it without a bank account, and every transaction is anonymous and free. That contrasts with today’s digital payments, where private companies, often headquartered outside Europe, impose fees, track purchases, and exclude citizens without access to apps or smartphones. Economists warn that without a public digital alternative, the eurozone risks losing control over its financial infrastructure to foreign platforms.
The project for a digital euro is intended to address this. It would be issued directly by the European Central Bank, distributed through digital wallets, and function both online and offline. Even during blackouts or network failures, citizens would be able to make payments privately, in the same way they can with cash. Its universal acceptance would guarantee resilience and preserve monetary sovereignty across the eurozone.
Between 2019 and 2024, the share of cash in euro area transactions fell from 68 percent to 40 percent by volume, and from 40 percent to just 24 percent by value. This dramatic change highlights the urgency of adapting public money to the digital era. Without a credible state-backed alternative, private payment systems will dominate, leaving citizens dependent on infrastructures shaped by commercial rather than public interest.
European researchers emphasize that a digital euro could also set common technological standards, promote competition, and reduce costs for merchants, particularly small businesses that still rely heavily on cash. Analysts at the Kiel Institute argue that if properly designed, the project would balance efficiency with public trust, but they also caution that banks must remain integrated into the system to prevent destabilization of deposit models.
Politically, the initiative is highly sensitive. In the European Parliament, supporters frame the project as a tool to defend financial autonomy. Critics warn it could undermine the role of commercial banks or accelerate the decline of physical cash. The ECB expects to complete its technical preparation phase by October 2025. Legislative approval would open the way to a rollout between 2027 and 2029, although much will depend on the political climate in major member states.
Globally, the project carries strategic weight. In Asia, experts note that Europe’s effort reinforces its ambition to achieve financial sovereignty at a time of dependence on foreign platforms. In North America, analysts view the digital euro as a step toward resilience in an increasingly fragmented monetary system. From Africa and the Middle East, economists argue that Europe’s leadership in digital public money could strengthen regional payment systems and provide a benchmark for transparency.
Human rights organizations have welcomed the plan’s privacy safeguards, including the possibility of offline transactions without data collection. For watchdogs monitoring central bank digital currencies worldwide, the digital euro stands out as an experiment in balancing technological innovation with democratic oversight and individual protections.
Ultimately, the project is not about competing with the U.S. dollar or other global currencies. It is about ensuring that public money remains visible, usable, and protected, even as it shifts into digital form. For European officials, the message is clear: as cash fades, the euro must evolve without losing the qualities that make it a public good.
Narrative is power too.
La narrativa también es poder.