The digital euro could be a major boost for European integration
LSE European Politics<br>Bridging research, policy and public debate on Europe
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LSE European Politics<br>Bridging research, policy and public debate on Europe
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Paul Schmidt
Miguel Otero-Iglesias
July 15th, 2026
The digital euro could be a major boost for European integration
0 comments<br>| 1 shares
Estimated reading time: 6 minutes
LSE European Politics
Bridging research, policy and public debate on Europe
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Paul Schmidt
Miguel Otero-Iglesias
July 15th, 2026
The digital euro could be a major boost for European integration
0 comments<br>| 1 shares
Estimated reading time: 6 minutes
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Talks aimed at creating a digital euro are entering their final stage in the EU’s institutions. Paul Schmidt and Miguel Otero-Iglesias write the digital euro could significantly reduce dependence on US companies and lower payment fees, but it will be vital to use effective communication to address public concerns about the project.
Since its introduction as cash nearly 25 years ago, the euro has developed into a symbol of European identity. Today, almost 360 million people in 21 EU member states use the common currency. The euro is also legal tender in Monaco, Andorra, San Marino and the Vatican City. Kosovo and Montenegro adopted it unilaterally, and more recently Hungary’s new Prime Minister, Péter Magyar, announced that he intends to examine the possibility of replacing the Hungarian forint with the euro.
The euro has made Europe “tangible” for everyone in their daily lives: first, as cash in people’s pockets, but also sometimes carrying the can for perceived shortcomings of European integration and as a scapegoat for member countries’ economic mismanagement.
Nevertheless, the euro, as the currency of the European Union, is highly valued today. According to Eurobarometer data, three out of four Europeans are in favour of it – in Austria, support stands at 71 percent, in Spain it reaches 87 percent. Even in EU countries that have not yet adopted the euro, its image is often surprisingly positive, especially in Hungary and Romania, while public opinion in Poland and the Czech Republic remains rather sceptical.
In times of crisis and global instabilities, a stable currency that contributes to greater independence and resilience is paramount. Acceptance of the euro therefore extends well beyond the euro area and the European Union itself. In many countries of Central, Eastern and Southeastern Europe, the euro enjoys a high level of trust – often higher than the respective national currency – and is widely used as a means of saving and as a store of value.
This is also relevant for potential future rounds of EU enlargement. To qualify for EU membership, candidate countries must not only demonstrate that they can comply with the rules of the European Economic and Monetary Union – they are also obliged to adopt the common European currency at a later stage after becoming EU members.
The digital euro
Yet, today’s payments landscape is entirely different from what it was 25 years ago. The trend toward ever more digital and non-cash payments, with roughly two-thirds of such transactions in the EU now processed through international card payment systems, has created substantial dependencies on non-European payment service providers, led to significant profit outflows, raised concerns about inadequate data protection and reduced the symbolic visibility of the euro itself.
This is why negotiations are now taking place in the EU’s institutions over the creation of a digital euro capable of addressing these gaps. By complementing cash, the digital euro would provide a secure, socially inclusive, free and uniform payment method across Europe, while also including offline functions to ensure cash-like privacy levels. The EU institutions are expected to reach an agreement on the specificities of the project by the end of the year, with the digital euro’s full rollout across the eurozone ready in 2029.
Central bank digital money is not an exclusively new European idea. According to the Atlantic Council, around 146 countries worldwide are working on introducing a digital equivalent of cash. For European businesses, especially retailers and small enterprises, the planned payment alternative could generate substantial cost savings through a significant reduction in card fees.
If EU candidate countries were allowed to take certain integration steps already before their official EU accession to speed up the EU’s slow enlargement process, the digital euro could play an important role. Its introduction offers an opportunity to bring EU member states and candidate countries closer together more quickly, digitally anticipate the expansion of the eurozone and thereby contribute to both the acceleration and deepening of European...