This T2 system failure, which occurred in late February 2025, lasted nearly a day and raised concerns regarding the ECB's reliability in managing a digital currency.

European lawmakers are expressing skepticism about the European Central Bank's (ECB) digital euro initiative, particularly following a significant outage of the Target 2 (T2) payment system that disrupted transactions for numerous households and traders.

In light of these events, ECB President Christine Lagarde emphasized the urgency of the digital euro, stating its relevance is increasingly critical for both wholesale and retail transactions.

Despite mixed responses from member states regarding the necessity of a digital euro, the ECB continues to push forward with its plans, although lawmakers' resistance could hinder progress.

Lagarde has stressed the importance of collaboration with various stakeholders, including the European Parliament, European Council, and European Commission, to ensure the successful implementation of the digital euro.

Johan Van Overtveldt from the European Conservatives and Reformists Group has called for proof of the ECB's ability to maintain a secure financial infrastructure before advancing the digital euro project.

However, progress on the digital euro legislation has stalled since its proposal in June 2023, largely due to skepticism from lawmakers and the banking sector.

Lagarde announced plans to launch the digital euro by October 2025, contingent on new legislation, which the ECB aims to have ready by autumn 2025.

Concerns have also been raised by bankers, who fear that a digital euro could lead to a decline in their deposits as customers might prefer the ECB's secure digital wallets.

Rasmus Andresen, a member of the parliamentary committee supervising the ECB, highlighted that restoring public trust is crucial for the success of the digital euro.

The digital euro aims to provide an electronic wallet backed by the ECB, distributed through banks and wallet providers, as a response to the growing influence of U.S. stablecoins in digital payments.

If approved, the digital euro would align the EU with countries like the Bahamas, Jamaica, and Nigeria that have already launched their own central bank digital currencies (CBDCs), contrasting with the U.S. stance against a federal digital currency.