Dr. Vicente Moreno Casas & Bosco Aspe Maella // 11 February 2026

The EU is considering the introduction of a digital euro as a new public retail payment instrument, intended to complement cash and existing private payment solutions. This paper argues that the case for such an intervention remains weak in a market that already delivers fast, low-cost, and innovative digital payments. Rather than addressing a clear market failure, the proposal risks expanding regulation and public control without delivering commensurate benefits.

Drawing on expert survey evidence from the EU Regulatory Observatory, the paper shows that the digital euro is widely perceived as a regulatory expansion rather than a liberalising reform. Mandatory acceptance rules, holding limits, and operational requirements would extend the European Central Bank’s footprint into an already competitive payments ecosystem.

While some potential benefits are acknowledged, including strategic autonomy and greater resilience, these are largely viewed as conditional and achievable through less intrusive alternatives. Improvements in interoperability, regulatory simplification, and private sector innovation are identified as more proportionate ways to strengthen Europe’s payment landscape.

The paper recommends reassessing the necessity of the digital euro and prioritising competition, decentralisation, and robust privacy protections within existing payment systems. A more restrained approach would preserve innovation, limit centralisation, and avoid the long-term risks to competition, privacy, and monetary governance associated with a state issued digital payment instrument.

The main findings of the briefing include:

• The digital euro is a legislative proposal (2023/0212(COD)) tabled under the EU’s Digital Finance Package, aiming to establish a central bank digital currency issued by the ECB for retail payments, to complement cash and existing private payment solutions.
• The EU Regulatory Observatory’s expert panel delivers a predominantly skeptical verdict. Most assessments cluster in the 2-4 range on the regulation–deregulation scale, indicating that the proposal is perceived as a regulatory expansion rather than a liberalising reform, a conclusion reinforced by confidence-weighted scores.
• Experts broadly agree that the euro area already benefits from efficient, low-cost, and innovative payment options, including cash, card-based systems, instant bank transfers, and mobile payment applications, calling into question the necessity of a new public retail
  payment instrument.
• COM/2023/535 combines two binding legislative acts – A Head Office Tax System for cross border SME groups and a 30-day payment mandate – with seventeen complementary tools and initiatives designed to facilitate tax simplification and provide sectoral reporting relief and digital support.
• The main concerns relate to the extension of legal tender status, mandatory acceptance rules, holding limits, and operational requirements, which are seen as increasing regulatory weight and expanding the institutional footprint of the ECB in an already competitive market.
• Some respondents acknowledge potential benefits, such as strategic autonomy and increased resilience, but these are widely viewed as conditional and achievable through less intrusive alternatives, including interoperability, regulatory simplification, and private-sector
  innovation.
• Overall, the expert assessment suggests that the digital euro represents an expansion of public involvement in retail payments, raising longer-term questions for competition, privacy, and monetary governance that remain relevant throughout the legislative process.