An ECB official has defended the European Central Bank’s digital euro project, stating that it would function more like the reliable, 24/7 instant payment system TIPS (TARGET Instant Payment Settlement) rather than the Target 2 (T2) system, which suffered a recent outage.
TIPS is designed to handle millions of small, real-time payments between banks across the eurozone, while T2 settles fewer but larger transactions. The breakdown in T2 last month caused delays for thousands of households and traders, as banks were unable to settle transactions for nearly a day due to an initial misdiagnosis of the issue.
Lawmakers have expressed concerns about the ECB’s ability to deliver the digital euro, with some questioning how the central bank could manage a new payment system when it struggled with its day-to-day operations. Markus Ferber of the European People’s Party called the incident “a blow to the ECB’s credibility,” adding that people would question the ECB’s capacity to run a digital euro.
Despite the criticisms, the ECB official pointed to TIPS as a model, emphasizing its reliability and the millions of small payments it handles daily. TIPS experienced only minor delays during the T2 outage.
The incident has spurred resistance among some European lawmakers, who now question the ECB’s readiness to proceed with the digital euro. Rasmus Andresen, a Green politician, warned that the ECB needed to restore citizens’ trust or risk the project’s failure.
Jussi Saramo of The Left supported the digital euro but stressed the importance of the ECB improving its systems. Eurosceptic Johan Van Overtveldt also urged the ECB to prove it can maintain secure financial infrastructure before proceeding.
The digital euro, pitched as a response to U.S. President Donald Trump’s push for stablecoins, is designed to be an electronic wallet guaranteed by the ECB. The ECB hopes to have the legislation in place by autumn to officially launch the project, despite resistance from bankers who fear it could reduce deposits in commercial banks.
