EU's Financial Future: Leithner Calls for Digital Euro to Boost Autonomy

Deutsche Börse CEO, Stephan Leithner, has called for the European Union to introduce a digital euro to boost the region's financial autonomy. In a policy paper released on February 15, Leithner proposed a comprehensive 10-step strategy to evolve the EU's Capital Markets Union (CMU) into a Savings and Investments Union (SIU), with a central bank digital currency (CBDC) at its core.

Leithner believes that a permanent digital euro would serve as a strategic asset, enhancing the EU's policy framework and its position as a leader in digital innovation. He called for a collaborative effort between the European Central Bank (ECB) and national central banks to integrate the digital euro into the capital markets ecosystem effectively.

The Deutsche Börse CEO highlighted the necessity for technological advancements in "cash on ledger" or "programmable payments" systems to ensure a smooth integration of the EU's permanent CBDC with existing payment systems and services. Leithner expressed that a CBDC would not only streamline financial transactions but also bolster the EU's economic sovereignty.

Additionally, Leithner pointed out that by aligning key regulatory frameworks within the EU, such as the Markets in Crypto-Assets Regulation (MiCA), the AI Act, and the Digital Operational Resilience Act (DORA), the euro could gain a competitive advantage globally. He underscored the need to minimize the influence of the US dollar on Europe's financial landscape.

While the proposed digital euro is seen as an essential tool for enhancing the EU's financial stability, competitiveness, and innovation, Leithner's policy paper did not delve into specifics regarding the technical implementation or the regulatory framework required for its introduction.