The digital euro: benefits and risks for citizens

In recent months, the European Union has made progress in creating a central bank digital currency (CBDC), known as the digital euro, with the aim of making it an electronic version of the euro, issued by the European Central Bank (ECB) and available to the public for everyday payments. The project has passed the study phase and, according to the institutions, is entering a development phase that could lead to its issuance in the coming years if the legal framework is approved. There is talk of a possible launch of this currency around 2029.

The digital euro can offer safer, faster payments under European control, but its design will determine whether the benefits or risks prevail.

According to the ECB, the digital euro could bring several benefits.

• Security and state guarantee: the digital euro would be central bank money, with the same level of security and guarantee as banknotes and coins, which would make it less risky than some private instruments. This could strengthen confidence in means of payment.
• Inclusion and payment efficiency: it could facilitate immediate payments between individuals and businesses, both online and potentially offline, reducing fees and friction from private providers.
• Sovereignty and competition: the EU argues that a CBDC preserves monetary sovereignty against external payment platforms and the advance of private digital currencies. This is presented as a protection of European economic independence.

Despite all the announced benefits, there are many risks that raise doubts about the need to implement this currency.

• Privacy and administrative control: unlike cash (which is anonymous and offline), a CBDC can leave a digital trail of transactions. This opens the door to increased analysis capabilities and, if strict safeguards are not regulated, to easier administrative or judicial controls over how and when money is spent. The fact that it can be a programmable currency may be useful in public policy, but it can also limit economic freedoms if abused.
• Concentration and public power: if the government or the central bank can access data or control flows, there is a risk of increased political control over the economy, for example through economic sanctions or restrictions on use, with an impact on civil rights if there are no very clear legal safeguards.
• Impact on commercial banks: if many citizens transfer their deposits to CBDC accounts, banks could lose resources for lending; the financial ecosystem has proposed solutions such as holding limits and compensation mechanisms, but the transition entails uncertainty.
• Cybersecurity and resilience: as critical infrastructure, CBDC could become a clear target for cyberattacks. Technical protection and contingency plans will be crucial to avoid disruptions or massive losses.

In short, the digital euro can offer safer, faster payments under European control, but it is not neutral: the way it is designed (privacy by default, holding limits, independent supervision, legislative transparency) will determine whether the benefits or risks prevail. For this reason, the final decision is not only technical, but also political and regulatory, and it is necessary to demand strong legal guarantees in terms of privacy and separation of uses, to avoid arbitrary programmability, as well as mechanisms that preserve banking intermediation and individual freedom.