Cryptonews Features

Is It Too Late for the Digital Euro?

Digital Euro MiCA

Regulation Stablecoin

Experts weigh in on the digital euro future, challenges, and whether Europe needs it.

Features writer

Olga Primakova

Features writer

Olga Primakova

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Olga started writing about cryptocurrency and finance in 2021.

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Last updated:

May 8, 2025

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Key Takeaways:

The digital euro isn’t meant to replace cash, but experts question whether it’s needed at all.
Privacy concerns and competition from stablecoins could slow down adoption.
A fully functional digital euro may not arrive before 2027 or even 2030.

Europe is moving closer to launching a digital euro, a new form of money designed for the digital age. But experts are still debating a key question: does Europe really need it, especially when stablecoins and tried-and-tested systems are already in place?

At the UN:BLOCK conference, held on April 2 3–24 in Riga, industry leaders shared their thoughts on the future of the digital euro. Speaking with Cryptonews, they discussed the hopes and concerns surrounding this new tool, what problems it aims to solve, and the risks it could pose to traditional banks.

Reinis Znotins, Co-Founder of UN:BLOCK, pointed out that building a successful digital currency also depends on a supportive regulatory environment. In his view, Latvia is already setting an example in Europe:

Latvia is quickly establishing itself as a leading Web3 hub in Europe. With a bold vision for the digital asset economy, it offers a regulatory environment tailored to the needs of global blockchain and crypto companies.

Digital Euro Is ‘Complement to Cash, Not a Replacement’

Aivars Belis, CTO at Next Generation, also shared his perspective with Cryptonews. He said concerns about privacy around the digital euro, a type of Central Bank Digital Currency (CBDC), may be overstated:

The EU economy is regulated and already highly transparent. Financial institutions have operated within a well-regulated environment for a very long time, and for the overwhelming majority of them, regulations are synonymous with security, guarantees, and reduced fraud risk. […] Given these points, we believe it would be inaccurate to characterize reluctance toward CBDCs as a widespread phenomenon.

Belis emphasized that CBDC is not meant to replace cash but to provide an alternative:

Privacy is undoubtedly important in general. However, the key feature of CBDCs lies in the technology that enables low costs, high speed, and robust security. […] CBDCs are not mandatory but rather an alternative option to existing payment methods.

He also noted that stablecoins and the digital euro aren’t designed to serve the same function, describing the CBDC as “a complement to cash, not a replacement.” Additionally, it could be seen as a tool for European integration, helping build a unified digital payment infrastructure across the eurozone.

Belis noted a key advantage of the CBDC over private entity:

MiCA-compliant stablecoins, even with their improved regulatory safeguards, ultimately represent a claim on a private entity. This creates a fundamentally different risk profile from central bank money, which is a direct liability of the central bank itself. […] When a transaction settles in central bank money (whether physical cash or a digital euro), the settlement is absolute with no counterparty risk.

He also pointed out some of the key problems a digital euro could address, calling them “low transaction speed, higher transaction costs, and fragmentation of the financial landscape.”

When it comes to the timeline, Belis warned against expecting quick results:

While the technological infrastructure is largely ready for CBDC adoption, financial systems cannot—and should not—transform instantaneously. […] Based on current trajectories, full implementation could realistically span several years.

‘Usage of Existing Stablecoins Would Be Better Than CBDCs’

Edgars Laimite, Head of Trading and Co-Founder of Gravity Team, told Cryptonews that privacy will be a crucial issue for the CBDC:

It would be discouraging if everyone knew where all your payments are going. There are projects building out CBDCs that try to make certain aspects private. This seems to be possible with comprehensive ZK proofs.

In his view, existing stablecoins might actually be a better option:

Usage of existing stablecoins would be better than CBDCs. Allowing multiple issuers would be even better because it would make businesses compete for better offerings. Many stablecoins already have blacklists therefore if an illicit actor receives money it can be blocked.

Laimite added that the success of the digital euro will depend on how it’s implemented:

If digital euro would be fully on chain then it would bring transparency in government spending. As well as on how much money is in circulation and activity of people. This would better predict a crisis and would therefore stabilize the current financial system. We would also cut lots of costs in the banking sector.

He also pointed to potential risks for traditional banks:

Banks make lots of money from people’s deposits. If people start holding their own assets this is not possible. However banks could release their own stablecoins to gather the interest. Many payments would be possible without bank fees. I think that there would be space for KYC, lending, payment processing (POS terminals), currency exchange and others.

As for timing, Laimite offered a realistic estimate:

I think broader adoption for technology would come till 2030. Start using it probably in 2027.

The introduction of the euro CBDC is met with both optimism and skepticism across the industry. On the one hand, the new currency could increase transparency, lower costs, and speed up payments. On the other hand, questions remain around privacy, competition with existing stablecoins, and its potential impact on the banking system.

Even with all the debate, experts agree that launching will take time and won’t be easy. It’ll need a flexible approach.

At the same time, Znotins believes Latvia’s proactive policies could serve as a model for countries looking to foster innovation while maintaining oversight:

Key advantages include the ability to pay share capital and taxes in crypto, a streamlined MiCA licensing process, and the lowest supervision fees in the EU. These forward-looking policies position Latvia as a top destination for Web3 innovation – combining regulatory clarity, agility, and cost-efficiency at the heart of the European Union.