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Vujčić: digital euro will not replace cash, pilot testing coming soon

<p>Predavanje Ante Čičin- Šain u organizaciji Hrvatske narodne banke (HNB). Guverener HNB-a Boris Vujčić.</p>
Predavanje Ante Čičin- Šain u organizaciji Hrvatske narodne banke (HNB). Guverener HNB-a Boris Vujčić. / Image by: foto Boris Ščitar

The digital euro is increasingly mentioned as one of the key projects through which the European Union aims to strengthen its monetary and technological autonomy. It is a potential digital form of money that would be issued by the central bank and would be available to citizens for everyday payments, alongside existing cash and private digital payment methods. The future of this project was discussed at the Money Motion conference by the governor of the Croatian National Bank, Boris Vujčić, and N1 journalist Hrvoje Krešić.

Vujčić emphasized that he hopes the digital euro project will receive the necessary political support in European institutions. According to his expectations, voting in the European Parliament could take place as early as this summer, while the first pilot project could start in 2027.

The digital euro is not the abolition of cash

According to his interpretation, the digital euro also represents a response to current geopolitical circumstances. He believes that its introduction could provide a strong political and strategic impetus to the European Union, especially in the context of increasing competition from global financial and technological systems.

The conversation also opened the question of the future of cash. Krešić asked whether the digital euro means a gradual abolition of physical money, to which Vujčić jokingly replied that he has ‘his signature on every banknote’ and that he is a strong advocate of cash. He emphasized that cash will not disappear, but that the digital euro should be viewed as its digital equivalent, or as a form of central bank money adapted to the digital age.

The digital euro, he said, would become an official means of payment. For citizens, its use would not be mandatory, but merchants would have to accept it. Citizens could use it without a fee, while merchants would pay a certain fee for acceptance, although significantly lower than today’s card payments.

When asked about privacy and security, Vujčić said that such concerns are legitimate, but emphasized that central banks would not have insight into individual personal data of users. They would only have access to aggregated data on the total amount of digital euros in circulation, which is necessary for conducting monetary policy.

Speaking about possible limitations, he explained that there would be limits on the amount of digital euros that individual users could hold. The reason is, among other things, the fact that the digital euro represents a direct liability of the central bank, but also the need to maintain the stability of the banking system. Digital euro accounts, he emphasized, would not be designed as savings accounts.

How Europe and America differ

Krešić also raised the question of the difference between the European and American approaches to digital money, particularly regarding stablecoins. Vujčić pointed out that the U.S. relies more on private issuers of stablecoins, while the European approach is different. One of the reasons he cited is that six out of eight cashless transactions in Europe today occur through American platforms such as Visa, Mastercard, and PayPal.

In this context, he sees the digital euro as a way to strengthen European financial sovereignty.

Speaking about the regulation of the crypto industry, Vujčić explained that in Croatia, regulatory competencies are divided between the Croatian National Bank and the Croatian Financial Services Supervisory Agency. HNB is, according to the European regulation Markets in Crypto-Assets Regulation (MiCA), responsible for supervising stablecoin issuers, while HANFA regulates service providers related to crypto assets (VASP). He added that so far, no significant activity has been observed in this sector in Croatia.

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