The introduction of a digital euro could transform not only the way European citizens will make pay- ments in the future, but also how the ECB operates. It could also have a major impact on the structure and functioning of the European financial system. While the final decision has not been made yet and the pros and cons of the different technical options are still being debated, greater attention should be paid to the complementarity between the introduction of the digital euro and the implementation of other institutional reforms. The risks of bank disintermediation or greater financial instability could be minimized or even transformed into an opportunity if the introduction of the digital euro were to be accompanied by the implementation of the Capital Market Union and the completion of the banking union. Also, a common digital currency could have limited benefits without a common digital “safe” financial asset. Only if it is part of a wider reform process, the introduction of a digital euro could strengthen the international role of the euro.

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