BERKELEY—After years of preparation, the EU’s three governing bodies – the European Parliament, the European Council and the European Commission – are finally ready to begin formal negotiations on the digital euro. When they do, a project once conceived as a technocratic modernization of monetary infrastructure will become one of the most politically contested points on the bloc’s agenda.
The Commission and the European Central Bank (ECB) have described the digital euro as an effort to adapt fiat currency to the digital era. This framework, although incomplete, took the project to the technical preparation phase. It won’t get you much further.
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The digital euro is not just a technical update. It is a political project in the long tradition of European institution-building, and its success or failure will ultimately depend less on engineering than on the willingness of European leaders to defend it.
Resistance is likely to emerge from several fronts. US President Donald Trump’s administration has taken an openly hostile stance toward central bank digital currencies while promoting private dollar-denominated stablecoins.
Russia will almost certainly treat the digital euro as another front in its hybrid war against Europe. And within the EU itself, Eurosceptics will use the project as proof of technocratic excesses and turn it into a magnet for conspiracy theories.
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European policymakers have spent years laying the technical foundations for the digital euro. They must now approach the political fight over their future with the same rigor.
For nearly 80 years, Europe has pursued what the late British historian Tony Judt described as building a collective capacity to compensate for individual weaknesses.
The European Coal and Steel Community, the common market, the single currency, the Schengen Agreement and the enlargement of the EU – each was an act of political will that helped transform the catastrophe of the Second World War into an enduring system of shared institutions. Taken together, these efforts constitute one of the most successful political experiments in modern history.
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However, the decades-old European integration project is under immense pressure. As Russia continues to wage war against the liberal democracies of Europe, American security guarantees can no longer be taken for granted. But China is reshaping global trade in ways that pose an existential threat to Europe’s industrial base.
As German historian Kiran Klaus Patel has argued, the EU’s self-image has often outstripped its actual achievements. In practice, integration has been uneven, fueling resentment that far-right parties across the continent have exploited to gain power and undermine the European project.
For many Europeans, “Europe” is seen less as a political community and more as a distant abstraction – a source of regulations, restrictions and acronyms that rarely improve everyday life.
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The freedoms that European integration has provided are real, but easily taken for granted. Costs, on the other hand, are concrete and easy to reject. Any political project supported by elite consensus and treaty law would be inherently fragile.
At the heart of this fragility is what the late German philosopher Jürgen Habermas described as the “allure of technocracy”: the temptation to advance European integration through mechanisms that bypass the democratic publics in whose name it is sought.
The digital euro, designed by experts in Frankfurt and Brussels, risks falling into the same trap, because technically sound but poorly understood decisions are easy targets for political attacks.
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A recent Bundesbank survey highlighted the problem, revealing that only 42% of Germans had heard of the digital euro and that only a quarter of those could explain precisely what it is.
Habermas, however, pointed to a solution: a shared European identity, based on broad participation in common institutions. The digital euro could provide precisely this kind of shared experience. Most forms of European integration, from regulatory harmonization to tax rules, remain invisible to ordinary citizens.
But a digital currency would allow hundreds of millions of Europeans – most of whom know little about the institutional mechanisms of integration – to interact daily with the same payments system, using the same interface, wherever they are in the eurozone.
The single market has proven remarkably easy for American companies to master. Around two-thirds of eurozone credit card transactions rely on Visa and Mastercard, and 13 of its 21 members do not have a national alternative.
Each transaction carries commissions that act as a private tax on European trade. The EU’s current push for strategic autonomy in defense, semiconductors and cloud infrastructure means little if it does not extend to the payments systems that underpin the European economy.
For a generation that has experienced integration primarily as a set of restrictions, the digital euro could become a highly visible European institution that makes life easier. Few initiatives on the European agenda could demonstrate the tangible benefits of cross-border integration and cooperation so effectively.
Whether the coming years will reestablish the European project for a radically reconfigured world or mark the beginning of a deeper fragmentation may well depend on how the debate over the digital euro unfolds.
A united EU would remain a continental power with a unique commitment to liberal democracy, human rights and a sustainable future, while a fragmented Europe would be much more vulnerable to external coercion.
The ECB cannot politically defend the digital euro. The European Commission, national governments and the European Parliament must do so. And they must be honest about what they stand for: the digital euro is not just an effort to modernize the eurozone’s payments system; is a European institution that happens to be in the form of a payments system.
Political decision-makers must defend this cause clearly and vehemently. The digital euro must not become another technocratic artifact, imposed from above and the target of widespread distrust. It must be a living expression of Europe’s highest ambitions.
Translation by Fabrício Calado Moreira
Copyright: , 2026.
