European Union lawmakers in Strasbourg have now agreed on their position regarding the digital euro, approving it in a vote on the 8th of July 2026. With this position, the European Parliament can start talks with national governments on the details of the design and functioning of the digital euro.
The ECB argues that the digital euro is required to preserve the benefits of cash in a digital age and protect Europe’s monetary sovereignty, while offering a fast, secure, widely accepted public means of payment. However, it is not a neutral or purely technological upgrade to Europe’s payments infrastructure. It is a political and technological project that may embed surveillance, monetary control, and fiscal dominance into the very structure of the currency.
EU lawmakers are now debating the regulation that will define the legal status, privacy framework, and holding limits of the digital euro, with the ECB openly lobbying for strong legislation to support what it calls a collective step forward for Europe. This means the most significant features, including programmability, limits, data access, and the role of commercial banks, will be decided in Brussels and Strasbourg rather than by markets or citizen demand.
The ECB sells the digital euro on four main promises: more efficient payments, greater monetary sovereignty, financial inclusion, and higher privacy than current private electronic payment systems. Not one of those claims holds up once you look at them, even briefly.
Let us go one by one.
Efficiency and universal acceptance. Europe already has instant payments, multiple card schemes, and a dense network of private providers that allow fast, cheap, electronic transactions across the euro area and internationally. There is no evidence that adding a centralized, programmable central bank account for every citizen solves a problem that existing infrastructure cannot address through open competition, decentralized independent options, and innovation.
Monetary sovereignty and autonomy. The ECB claims that a digital euro is essential to maintain the autonomy of the monetary system and reduce dependence on non‑European providers. This makes little sense at a time when the euro’s role as the second world reserve currency is widely accepted, demand for euro assets is strong, and there are already various private and independent projects that successfully compete with non‑European providers. A currency’s role as a reserve asset and the success of domestic payment systems versus international alternatives are achieved not through imposition but through the confidence and demand of citizens and businesses.
If the European Central Bank truly wanted to preserve the purchasing power and credibility of the euro, it would not need legal privileges or a mandated digital form to remain globally relevant. Resorting to a central bank digital currency (CBDC) is an admission of weakness, not of strength.
Financial inclusion. Retail CBDCs are presented as free, basic‑use tools for the unbanked. However, in Europe, financial exclusion is driven more by regulation, taxation, and economic stagnation than by a lack of digital payment options. Imposing a centralised, identity‑linked wallet does nothing to tackle those structural barriers. Moreover, financial inclusion does not require a digital ID and a centralized central bank account; it requires more competition and decentralized private options.
More private than commercial solutions. The ECB promises a high level of privacy, with allegedly anonymous data despite a required digital ID and offline payments that are supposed to be close to cash. However, the architecture of a programmable, centrally controlled CBDC, governed by a central bank that openly incorporates political objectives into its policy toolkit, means that every transaction is, by design, potentially subject to surveillance and even sanctions.
If the main objectives were efficiency, competition, and technological progress, regulators would strengthen independent, decentralized solutions, independent payment providers, and open standards rather than concentrate the entire monetary transmission mechanism inside a single public institution. If the ECB believes all Europeans should be able to choose the digital euro, it only needs to issue it widely and let citizens decide, instead of forcing it.
Monetary sovereignty is not achieved by coercion but by freedom and rising demand. The euro is not at risk of losing its status as a reserve currency unless the objective is to destroy the purchasing power of money and force people to use it regardless.
The excuse used by the ECB and defenders of the digital euro, pointing to the “lost opportunity” of billions of euros invested in the United States instead of the European Union, makes no sense. European investors choose to invest globally, and if all funds do not remain in the European Union, it is a consequence of stagnation, excessive regulation, and a lack of opportunities. Furthermore, the ECB cannot expect to sustain a world reserve currency if most of the money it issues is destined to be used only domestically. That, in itself, undermines reserve‑currency status.
The risk of using monetary policy to inflate government spending even more than today becomes central. Monetary policy will not restrain government excess; it will enable it even more than it does now, with deposit savers and prudent investors as the main losers.
A central bank digital currency is not just electronic money. The main difference between today’s electronic money and a central bank digital euro is not digitization but control.
Under the current system, deposits sit at commercial banks, which act as intermediaries, absorb risk, and preserve a degree of separation between monetary authorities and individual transactions, even within regulatory and legal limits. With a retail CBDC, your main account will effectively sit at the central bank. That opens three dangerous channels of power.
Central banks will obtain direct, real‑time access to almost all transactions, eliminating the remaining financial privacy that cash and bank intermediation still provide. When every payment is registered in a central system, authorities can monitor patterns, flag undesirable behaviour, and build profiles far beyond legitimate law‑enforcement needs.
Programmability is a key concern in the architecture. CBDCs can be designed as programmable money, allowing authorities to increase or reduce balances, restrict where and on what funds can be spent, and impose expiry dates or penalties for behaviour deemed harmful, from “excessive” fuel consumption to politically unpopular spending.
This is not speculation. The ECB itself emphasises programmability as a way to make monetary policy transmission more fluid, which means faster inflation creation and quicker elimination of liquidity when central planners decide they may have overstimulated the economy. With the elimination of commercial‑bank and credit‑demand backstops, central banks can inject liquidity directly into retail accounts, completely merging monetary and fiscal policy. This removes the limits that bank lending and market discipline impose on government deficits, turning the currency into a tool of fast and largely unchecked budget financing.
In such a framework, a digital euro does not strengthen the currency; it tries to impose it. That is why the ECB insists that authorities must enforce its use through regulation, tax mandates, and legal‑tender rules.
European commercial banks are rightly alarmed by the prospect of a risk‑free digital euro account at the ECB competing with deposits, which would effectively turn banks into even more dependent subsidiaries of the central bank.
Lawmakers and supervisors already discuss individual holding caps of around 3,000 euros per person to limit the outflow from bank balance sheets, but this number is political, not economic, and can be revised at will. Even with caps, the presence of a central‑bank‑imposed alternative to deposits will weaken funding stability, raise funding costs, and push banks further into a marginal role in credit creation.
This has significant consequences.
The clearest is the crowding out of private credit. As deposits flow to the central bank and regulation favours this form of state money, banks’ ability to lend to families and businesses declines, while the safest and cheapest option remains financing governments. That accelerates the already clear bias toward public‑sector expansion at the expense of the productive private economy.
Today, inflationary episodes are at least filtered through bank risk appetite and credit demand. A digital euro allows the central bank to expand or contract the money supply directly in household and corporate wallets, eliminating essential limits and turning the currency into a pure instrument of political priorities, climate agendas, industrial policy, or social engineering. On top of that, the very programming architecture creates a perverse incentive that penalizes prudent deposit saving and conservative investment.
A complete misunderstanding of money has damaged the entire mechanism. It treats deposit savings as “unused money” when, in reality, all deposits are invested, and it sees foreign investment of euro funds as a negative rather than recognising that global, open, and free deployment of the currency is precisely what underpins its reserve status.
Formal independence and privacy laws are weak safeguards when the institution has already bowed repeatedly to political pressure to finance expanding states and tolerate persistent inflation. A CBDC amplifies this problem by adding the risk of social control to macro‑level monetary manipulation.
The result is a currency that is easier to use, harder to escape, and more vulnerable to discretionary political control.
If European policymakers genuinely wanted a stronger, trusted euro, their project would be completely different. They would promote decentralized and competitive payment systems, allowing independent providers, banks, and fintechs to innovate without being subordinated to a centralized, politically designed CBDC. They would focus on restoring the euro’s function as a store of value by ending the monetization of persistent fiscal deficits, rather than embedding those deficits into a programmable currency. And they would protect cash and private electronic money as essential tools of financial privacy and individual freedom, not as inconvenient relics to be eliminated.
The announced contracts with large technology firms and an aggressive legislative agenda suggest the true objective is to build the infrastructure for future social control, political engineering, and direct fiscal monetization. Surveillance disguised as money.