The European Union is entering a new era of so-called "digital money." Finance ministers of the member states have adopted plans to introduce the digital euro, which the European Commission has called "a milestone." The decision is intended to strengthen Europe's independence from American giants like Visa and Mastercard, which control over 80 percent of electronic transactions in the eurozone. But European banks are far from pleased, as they anticipate billions in implementation costs for the new systems.
The digital euro project, developed by the European Central Bank (ECB), is a digital counterpart of the common currency. It is designed to work offline as well, with a transaction limit, offering greater privacy. A potential launch is envisioned for 2029. The final decision will come no earlier than 2026.
In Austria, where 80 percent of electronic transactions pass through foreign servers, this is a pressing concern. Experts like Hans-Gert Penzel warn of a strategic dependency comparable to that in energy supply.
An unexpected ally for the ECB, however, has emerged in Italian banks. The Italian Banking Association (ABI) supports the project as a symbol of "digital sovereignty." "We are in favor of the digital euro because it embodies the concept of digital sovereignty," declares Marco Elio Rottigni, ABI's director general. Italy, scarred by financial crises, sees it as an opportunity to free itself from the technological dominance of the United States and China.
Yet enthusiasm wanes as costs mount. Banks estimate implementation expenditures for the digital euro at 4 to 5.8 billion euros. "The project costs are very high in terms of the capital expenditures banks must bear," Rottigni adds. The ECB plans 1.3 billion euros for development and 320 million annually for maintenance. Spanish MEP Fernando Navarrete fears the digital euro will create "a parallel payment ecosystem," hindering the development of private initiatives like the Wero system. ABI proposes a "twin model" — coexistence with private digital currencies so as not to undermine existing businesses.
While southern Europe embraces digitization, Austria is holding back. The government in Vienna has launched a "cash machine offensive," installing up to 120 new ATMs over two years in cooperation with the Austrian National Bank (OeNB) and the Association of Municipalities.
This is a response to strong public support for cash. Sixty-five percent of Austrians favor constitutional protection for cash. Austria views the digital euro at most as a supplement, not a replacement. In an age of blackouts and cyberattacks, cash remains "the last line of defense."
