Banking Outage Fuels Doubts Over ECB’s Digital Euro Viability

The TARGET2 (T2) system, which processes real-time payments across the Eurozone, experienced an outage in late February, leaving transactions stalled for several hours.

Political Backlash Against the Digital Euro

Some European Parliament members now argue that the ECB’s failure to maintain its own payment infrastructure raises doubts about its ability to manage a digital euro.

• Markus Ferber, a German MP from the European People’s Party (EPP), called the outage “a blow to the ECB’s credibility”.
• He questioned whether the ECB can effectively operate a digital currency if it struggles with existing payment systems:
  “People will ask legitimate questions how the ECB will be able to run a digital euro when they cannot even keep their day-to-day operations running smoothly.”

Geopolitical Pressure: Trump’s Stablecoin Push

The ECB’s push for a digital euro is partially driven by geopolitical concerns, particularly US President Donald Trump’s support for dollar-backed stablecoins.

• ECB board member Piero Cipollone warned that Trump’s pro-crypto stance could push European users away from traditional banks:
  “This solution, you all know, further disintermediates banks as they lose fees, they lose clients… That’s why we need a digital euro.”
• Trump’s March executive order supporting stablecoins and a US Strategic Bitcoin Reserve has sparked fears in Europe that the dollar’s dominance in digital payments could increase, undermining the euro’s monetary sovereignty.

What’s Next?

Despite the technical setback, the ECB is continuing to push forward with the digital euro project. However, with political opposition mounting and public trust shaken, the path to launching the euro’s digital counterpart remains uncertain.

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