European Central Bank President Christine Lagarde rejected claims in an exclusive interview with Euronews that the digital euro is designed to replace cash or allow the central bank to monitor payments, as the legislation entered a new phase following months of talks in the European Parliament.
The digital euro will complement, not replace, cash, and the goal is not to trace payments, European Central Bank President Christine Lagarde told Euronews in an exclusive interview, rejecting claims that the project is designed to monitor citizens.
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The European Parliament approved its negotiating mandate on Thursday, bringing the legislation a step closer to adoption by the end of 2026 after months of stalled talks.
The proposal initially faced criticism from members of the European Parliament, who argued that the digital euro could undermine privacy and eventually diminish the role of banknotes and coins as a means of payment.
"Let me celebrate the fact that the Parliament has endorsed massively the mandate for these negotiations that will hopefully be concluded by December," Lagarde told Euronews in an interview The Europe Conversation with Maria Tadeo.
The ECB president said the digital euro is intended to bring public money — currently available primarily in the form of cash — into the digital age as competition among jurisdictions increases. Like banknotes and coins, it would have legal tender status.
"Cash and the digital euro will both be legal tender, which means that nowhere in Europe can someone say, 'Sorry, I'm not taking your banknotes'," Lagarde said.
She also said the ECB would unveil a new banknote strategy by the end of the year.
"We will have a set of proposals for the new design and the new face of our banknotes. Cash will not go away, it will be rejuvenated," she said.
At its core, Lagarde added, the digital euro is also intended to strengthen Europe's strategic autonomy in payments and the processing of transactions.
Most card payments in Europe are processed through foreign-owned payment networks, prompting EU policymakers to push for a home-grown alternative as geopolitical tensions underscore the bloc's dependence on providers based mostly in the US.
"The best thing I know is a European solution. At the moment, we do not have that. So, if you pay, in most instances — in 60% of cases — you use payment infrastructure that is under foreign capital," Lagarde said, citing ECB data on card payments.
"We depend predominantly on US, but also sometimes Chinese, networks to organise payments. We need to have a European solution because we want to be sovereign at home," she said.