ECB Faces Scrutiny Over Digital Euro Amid Payment System Glitch

Doubts over the European Central Bank’s (ECB) ability to manage a digital euro have intensified after a payment system failure disrupted transactions for nearly a day.

Lawmakers now question whether the ECB can handle a large-scale digital currency if it struggles with existing infrastructure.

The outage in the Target 2 (T2) system, worsened by an initial misdiagnosis, exposed risks in centralized financial systems. Critics, including Markus Ferber and Johan Van Overtveldt, argue the ECB must first prove it can maintain a stable financial network, while others, like Jussi Saramo, support the project but call for improvements.

Despite the backlash, the ECB insists it will be ready by October, with Christine Lagarde highlighting leadership changes to keep the initiative on track. If delayed, Europe could lose its competitive edge in digital currencies to other nations. To succeed, the ECB must enhance security, transparency, and collaboration with financial and tech sectors.

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The concerns surrounding the digital euro project reflect broader hesitations about the adoption of central bank digital currencies (CBDCs). Many fear that without addressing technical and security issues, the ECB could end up with a system that fails to inspire confidence or meet the growing demand for digital payment solutions.

As such, the ECB faces increasing pressure not only to deliver on its promises but also to ensure that the system is resilient enough to stand up to real-world challenges.

Alexander Stefanov