Assessing the European Central Bank’s Institutional Capacity and Readiness for the Introduction of the Digital Euro

This paper examines the European Central Bank’s institutional capacity and readiness to introduce a digital euro in the context of accelerating digitalization, geopolitical uncertainty, and growing competition in the global monetary system. Rather than treating the digital euro primarily as a technological innovation, the study conceptualizes it as a multidimensional institutional project shaped by regulatory mandates, governance choices, stakeholder expectations and risk considerations. Drawing on institutional theory and stakeholder theory, the analysis adopts a qualitative research design combining semi-structured expert interviews with systematic document analysis of ECB and EU policy material. The findings indicate that while the ECB has developed a structured roadmap encompassing investigation, preparation and potential issuance phases, significant challenges remain across regulative, normative and cognitive dimensions of readiness. These challenges include tensions between privacy and compliance requirements, cybersecurity and interoperability risks, potential effects on financial stability, and the management of public trust and stakeholder acceptance. The paper argues that the success of a digital euro will depend not only on technical feasibility, but on the ECB’s ability to align design and implementation choices with institutional legitimacy and behavioral expectations. By integrating institutional readiness and risk analysis, the study contributes to the literature on central bank digital currencies and offers insights relevant to policymakers concerned with monetary sovereignty and financial resilience in the digital age.