## Digital Euro Readiness Completed: Europe Restructures Payment System

The European Central Bank (ECB) announced last week that it has completed its technical work and that the institution's digital euro project has entered the legislative phase. ECB President Christine Lagarde stated in a comment that, "We have completed our research, implemented all preparatory measures. Now, it is up to the European Council and the European Parliament to turn the Commission's proposal into law."

This decision is crucial for the future of Europe's payment system, redefining the role of central banks in the digital age. The digital euro has emerged to preserve the sovereignty of European currencies amid the growing influence of private payment platforms and stablecoins.

## Strengthening of Europe’s Payment Infrastructure

The digital euro is being developed as a public, widely accessible, and legal means of payment. According to ECB officials, this project aims to ensure financial stability, maintain the legal status of central bank money, provide modern payment methods, and strengthen Europe's payment infrastructure.

The retail central bank digital currency (CBDC), as a digital euro, is a digital public currency approved by the central bank and guaranteed by the state, with the same legal standing as cash. Unlike stablecoins, the digital euro directly becomes an application to the central bank and is fully backed, not a token guaranteed by private corporations.

"Our goal is to ensure reliable money for the financial system in the digital era, as well as to support high levels of privacy and inclusion," said Lagarde.

## Europe's Movement Under the Influence of Global Monetary Policies

The relevance of the digital euro project is linked to sharp changes in US crypto policy and a more lenient approach toward stablecoins. In January, Piero Cipollone, a member of the ECB Governing Council, emphasized the necessity of the digital euro amid debates about European currency sovereignty, against the backdrop of the Trump administration's policies aimed at strengthening US currencies.

Initial US legislative issues led President Donald Trump to sign the GENIUS Act in July. It is worth noting that Trump has consistently opposed central bank digital currencies, including CBDCs. In early 2024, he confirmed he would "never allow" a CBDC, believing such a currency would give the government excessive control over citizens' money.

In January, an executive order was signed prohibiting federal agencies from creating, issuing, or promoting CBDCs. This temporarily halted the development of CBDCs in the US.

## Control of Money and Tensions Between Private Systems

To fully understand central bank digital currency projects, it is essential to consider the context of ongoing discussions since 2021. At that time, European central bankers warned that if a digital currency was not issued, monetary control could be handed over to private or foreign payment systems, as cash usage declines.

Legislators are also exploring the possibility of the digital euro operating independently on open blockchains like Ethereum and Solana. "The proposed regulation for the digital euro is technology-neutral," said the ECB press office.

Discussions are moving from theory to implementation, with European institutions focusing on pilot projects and a clear timetable for deployment, expected to be around the end of the decade.

## Stablecoins and Digital Currency Alternatives

Amid the growing influence of stablecoins, the global monetary system is undergoing restructuring. The IMF warned in January that private digital currencies, including stablecoins, could threaten domestic monetary policy and financial stability.

Therefore, the digital euro project is of strategic importance for the European Union to strengthen its payment infrastructure. This initiative is not only about technological innovation but also a vital step in maintaining Europe's sovereignty and monetary control amid shifting global financial powers.