European Central Bank Executive Board members Piero Cipollone and Frank Elderson have framed the digital euro not as a rival to commercial banks, but as a cornerstone for strengthening their business models in a fiercely competitive digital payments landscape. In a commentary published on March 27, 2026, the duo emphasizes that this central bank digital currency brings central bank money into the digital age, serving as a springboard for innovative digitalisation strategies in retail payments and strengthening bank business models in the face of growing competition.
The blog post, titled "Digital euro: an opportunity for banks," arrives at a pivotal moment for the Eurosystem's project. Cipollone and Elderson underscore the digital euro's role in bringing central bank money into the digital age. "The digital euro brings central bank money into the digital age," they write, adding that it serves "as a springboard for innovative digitalisation strategies in retail payments and strengthens bank business models in the face of growing competition." This messaging directly addresses longstanding industry fears that a digital euro could disintermediate banks by drawing deposits away.
DISPELLING BANK COMPETITION FEARS
Concerns over central bank-commercial bank rivalry have dogged the digital euro debate since its inception. Cipollone and Elderson counter this head-on: "Some worry that the digital euro may lead to central banks competing with commercial banks. The opposite is true." Instead, they argue, the digital euro provides opportunities for banks to strengthen their position in a digitalised economy, where innovation is the key to staying competitive. ECB Banking Supervision, involved from the project's outset, has collaborated via the European Retail Payments Board—encompassing banks and other stakeholders—to integrate the digital euro into the ecosystem.
Through workshops and discussions with supervision experts, the ECB identified pathways to "future-proof bank business models in retail payment services." Two standout opportunities emerge: co-badging debit cards with domestic schemes and leveraging the digital euro's infrastructure for instant pan-European account-to-account payments. Co-badging would allow European debit cards to function seamlessly across borders without relying on international schemes for uncovered use cases. "By co-badging with the digital euro, debit cards offered by European banks could be used all across Europe," the ECB officials explain, likening the second avenue to a "USB-C cable we use for charging our phones"—a universal standard enabling broad compatibility.
These features hinge on forthcoming European standards, once legislation provides the necessary certainty. Private initiatives could then adopt the digital euro's front-end infrastructure pre-launch, upgrading payment terminals to expand bank services even before issuance. Banks will manage digital euro accounts, enabling them to maintain their existing business models by preserving strong, long-term customer relationships.
COUNTERING STABLECOIN THREATS
The push reflects acute awareness of external pressures. Today some innovative services are offered by non-banks, and the digital euro will help banks compete with these players by providing a European infrastructure that will enable them to develop innovative payment solutions that they can offer on a European scale. The digital euro positions banks centrally by having them manage accounts and layer services atop its infrastructure, retaining relationships.
This aligns with broader supervisory priorities. ECB Banking Supervision has been involved in the Eurosystem’s digital euro project from the beginning. This ensures that its in-depth expertise on bank business models, liquidity and overall financial stability is leveraged in order to shape a digital euro that is fit for purpose for achieving public objectives, without placing an excessive burden on banks.
PATH TO LEGISLATIVE CERTAINTY
Legislative adoption remains the linchpin. Once secured, it enables standards' finalization and terminals' upgrades, allowing merchants to go "digital euro ready." This legal certainty will enable private payment initiatives to start using the digital euro’s front-end infrastructure even before the digital euro is issued. As merchants upgrade their payment terminals, new devices can be made digital euro ready, allowing European banks to expand the reach and range of use cases of their private solutions even before the ECB issues the first digital euro. Cipollone and Elderson pledge continued collaboration: "We aim to continue working closely with the banking industry to make the digital euro a joint success, while preserving financial stability."
Europe's payment systems' competitiveness now rests on such autonomy. Banks have a crucial part to play in future-proofing the European payment landscape. That is why the Eurosystem has put them at the heart of the digital euro’s design since the start of the project. The digital euro emerges with banks pivotal in future-proofing the landscape.
Beyond sovereignty, inclusivity is key to trust. The project advances digital sovereignty and fair competition, but demands broad stakeholder buy-in. For banks, the digital euro flips the script from peril to opportunity. By embedding in co-badged cards, instant payments, and infrastructure, it fortifies models against disruptors. As ECB officials conclude, bank business models must be ready to meet the future head-on, matching the challenges faced and making the most of the opportunities that a rapidly changing world will bring. With supervision's backing and legislation imminent, Europe's lenders stand poised to lead the charge.