CBDC Fault Lines Emerge as Digital Euro Clash Divides Europe 

Key Takeaways

• The EU is divided over whether to adopt CBDCs.
• Some commercial banks oppose online digital euro payments that may compete with private sector solutions.
• While Member States are on course to approve the central bank’s proposal, there is more skepticism in the European Parliament.

As the European Central Bank (ECB) advances its digital currency agenda, opposition to the project is mounting.

With lawmakers and commercial banks among those voicing concerns, the EU’s central bank digital currency (CBDC) plans have exposed deep divides over what the future of money should look like.

Banks Divided Over Digital Euro

Digital euro advocates argue that the eurozone needs a retail CBDC to counter the influence of American payment systems.

When the ECB first started evaluating the idea in 2020, Visa and Mastercard created the most immediate backdrop to digital sovereignty debates.

But in 2025, USD stablecoins are increasingly viewed as the more pressing threat.

In the most ambitious version of the digital euro presented by the ECB, offline functionality would rival card systems, while online CBDC payments would compete with stablecoins.

However, in a statement reported by the Financial Times last week, 14 of Europe’s largest banks warned that online digital euro payments would also compete with private sector solutions currently being developed.

“The current design of the retail digital euro largely addresses the same use cases as private solutions, without offering any clear added value for consumers,” firms including Deutsche Bank, BNP Paribas, and ING stated.

Separately, a group of Italian banks backed the ECB’s plans a few days later, but with the caveat that they should be able to spread the cost of implementation over a longer period, Reuters reported .

ECB board member Piero Cipollone has said he expects the digital euro’s technical infrastructure to be in place within two to three years once a political agreement is reached.

At a meeting in September, Eurozone finance ministers agreed on a governance framework for the CBDC, setting the stage for the Council of the European Union to vote on legislation before the end of next year.

But although member states appear to be on board, the digital euro faces tougher opposition in the European Parliament.

European Parliament Leans Toward Offline-Only CBDC

Even if it receives a green light from the Member States, the ECB’s digital euro proposal still needs to be approved by the European Parliament.

Compared to the centrist-dominated Council, the EU’s lower chamber reflects a much broader range of views.

CBDC skepticism has emerged from both ends of the political spectrum.

Critics of the digital euro can be found among diverse parliamentary alliances, including the Greens and the European Conservatives and Reformists (ECR) group.

Reflecting doubts in parliament, Digital Euro Rapporteur Fernando Navarrete has sided with banks that object to online CBDC payments.

In a recent draft report, a Spanish lawmaker endorsed an offline digital euro system, but argued that the private sector should be given the opportunity to develop its own solution before implementing online payments.

Only in “the absence of a pan-European private sovereign retail payment solution” should the ECB launch an online retail CBDC, he argued.

With a legislative clash looming, gauging where the different parliamentary groups stand on the digital euro is challenging.

Beyond the small number who have been outspoken on the issue, there is no way to know how individual Members of the European Parliament will vote.

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