The European Central Bank (ECB) is pushing forward with its digital euro initiative amid growing urgency spurred by the Trump administration’s embrace of stablecoins. The ECB has been developing the central bank digital currency (CBDC) for years, with a final decision on its rollout expected by the end of 2024.
ECB President Christine Lagarde emphasized the importance of swift action, stating that a digital euro is more relevant than ever, both for wholesale and retail use. However, skepticism remains among lawmakers, particularly after a recent outage in the Target 2 payment system raised doubts about the ECB’s ability to manage a digital currency.
European Stability Mechanism Managing Director Pierre Gramegna further stressed the geopolitical implications of the U.S. shift toward crypto and stablecoins. He warned that Big Tech and U.S. firms could revive efforts to launch dollar-backed stablecoins for mass payments, potentially undermining Europe’s monetary sovereignty. To counter this risk, he reinforced the ECB’s urgency in making the digital euro a reality to ensure Europe’s strategic autonomy.
Gramegna’s remarks hint at concerns over Meta’s past Diem project, which sought to create a stablecoin-powered digital wallet before regulatory pushback led to its collapse. With the U.S. showing renewed support for stablecoins, EU officials see an accelerated need for a digital euro to maintain financial stability and sovereignty in the region.