Fourteen of Europe’s leading banks are pushing back against the European Central Bank’s plan for a digital euro. They argue the project could weaken private payment systems ahead of crucial parliamentary discussions in Brussels this week. 

Lawmakers are now calling for a scaling back of the initiative, arguing that it lacks clear benefits and risks duplicating market-led innovation. Meanwhile, the EU’s crypto regulation framework may unintentionally advantage US issuers.

The European Central Bank’s ambition to launch a digital euro by 2029 is encountering growing resistance across the continent. 

Fourteen major lenders —including Deutsche Bank, BNP Paribas, and ING— have formed a united front against the proposal. They believe the digital euro would duplicate existing private efforts to build a unified European payments network.

Their alternative, Wero, already operates in Belgium, France, and Germany, and aims to expand across the entire eurozone. It was designed to reduce reliance on non-European providers such as Visa, Mastercard, and PayPal. 

The banks behind Wero argue that the ECB’s proposed retail digital currency risks disrupting this progress instead of supporting it.

The growing resistance from the banking sector has now reached policymakers, who are questioning whether the project should proceed in its current form.

The ECB is pressing ahead with plans for a 2027 pilot, though the full rollout still needs political approval. Under existing law, the central bank cannot issue digital money without authorization from the European Parliament and national governments.

Lawmakers are increasingly concerned that an online version of the digital euro could compete with private payment systems, rather than complementing them.

Today, the European Parliament meets to discuss the digital euro. But it does so amid increasingly vocal opposition.

Fourteen European banks, including Deutsche Bank, BNP Paribas, ING and others, are warning that the digital euro will undermine private sector payment systems –…

Support is therefore building for a scaled-down, offline-only model that would act as a digital form of cash. It would allow payments without internet access and avoid overlap with established commercial networks already operating across Europe.

While the digital euro faces resistance at home, Europe’s broader regulatory agenda may also be strengthening its rivals abroad.

The EU’s Markets in Crypto-Assets (MiCA) framework, introduced to strengthen oversight and protect consumers, is producing unintended consequences for European issuers. 

MiCA grants EU holders redemption at par value without fees, even during market volatility. By contrast, US rules permit stablecoin issuers to set redemption fees and structure reserve policies that can prioritize domestic holders.

The EU's stablecoin own rules created a backdoor for US financial dominance.

The "multi-issuer loophole":

– EU entities must redeem stablecoins at par, no fees

– US entities can charge redemption fees

– In a crisis, everyone redeems through the EU

– US reserves get… pic.twitter.com/t3B2XDuPzU

This panorama creates a structural imbalance that leaves European companies at a disadvantage.

During periods of financial stress, EU issuers may face increased redemption pressure from global investors, while American firms remain protected. EU authorities, including the European Systemic Risk Board, have warned that such multi-issuer structures could channel redemptions into the EU and raise systemic risks.

Analysts say the timing couldn’t be worse. 

Dollar-backed stablecoins are growing exponentially, becoming an essential source of global digital liquidity. As they grow, they extend the dollar’s dominance into new areas of online finance, giving the US a strategic edge. 

Europe’s framework, intended to bolster financial autonomy, may therefore deepen reliance on foreign monetary systems instead. Together with the uncertainty surrounding the digital euro, this exposes a wider weakness in Europe’s financial strategy. 

Both initiatives demonstrate how regulation can overstep its goals, slowing innovation while increasing dependence on external infrastructure. 

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