Members of the European Parliament (MEPs) voiced reservations about the European Central Bank’s (ECB) digital euro project on Monday, after an outage in the bank’s existing payment system caused massive delays last month.
The issue was made worse due to an initial incorrect diagnosis of the problem by ECB technicians.
Representatives from four of the eight groups that make up the European Union’s legislature said the incident raised questions about the bank’s ability to deliver on its digital euro project, a new payment system open to all eurozone residents.
Markus Ferber of the European People’s Party, the largest group in the current parliament, who also sits on the parliamentary committee that oversees the ECB, said: “This instance is a blow to the ECB’s credibility. People will ask legitimate questions [about] how the ECB will be able to run a digital euro when they cannot even keep their day-to-day operations running smoothly.”
Green politician Rasmus Andresen, who also sits on the oversight committee, said the central bank had to restore citizens’ trust or the digital euro may be “at risk of failure.”
Johan Van Overtveldt from the Euroskeptic European Conservatives and Reformists Group said “the ECB should prove that it can maintain uninterrupted and secure financial infrastructure” before moving on with the digital euro.
This would essentially be an electronic wallet guaranteed by the central bank, which would also provide the infrastructure. It would be distributed by companies such as banks or wallet providers.
Jussi Saramo, of The Left parliamentary group, still backs the idea of a digital euro but said that there was a need for “the ECB to improve its own systems.”
She said the bank had a “very good team” which was “focused on accelerating the pace” of delivering the digital euro.
Speaking in Frankfurt on Mar. 6, Lagarde said, “The deadline for us is going to be October 2025 and we are getting ready for that deadline. ”
“I think it is critically important, and for the agnostics or the skeptics, it now seems more relevant and more imperative than ever before, both on the wholesale and on the retail level.”
The ECB said that a digital euro would not be a crypto-asset as they are not backed or managed by a central institution, “which makes them risky and unstable.”
“Instead, a digital euro would be backed by the same institution that backs your cash—us, the European Central Bank. And just like cash, it would always be worth its face value,” the website states.
The bank has pitched it in part as a response to U.S. President Donald Trump’s move to promote stablecoins, a type of cryptocurrency typically pegged to the U.S. dollar and increasingly used as a form of digital payment.
But bankers have been largely skeptical, fearing that it would decimate their vaults as customers switch some of their cash to the safety of an ECB-guaranteed wallet.
There is also resistance from EU parliamentarians, which may prove a hurdle for the ECB, as it needs them to pass legislation laying the ground for the digital euro.
The European Commission proposed digital euro legislation in June 2023, but not much has happened since. Still, the ECB hopes legislation will be in place by the autumn so it can vote to officially launch the project.
