Why Lithuania Views the Digital Euro as a Matter of Survival

While debates regarding the digital euro in Brussels often revolve around technical specifications or privacy policies, in Vilnius, the conversation is strikingly different. For the Baltic states, the implementation of a Central Bank Digital Currency (CBDC) is not merely a monetary upgrade; it is a critical component of national defense strategy.

The shadow of the conflict in Ukraine and the persistent threat of cyberwarfare have fundamentally shifted priorities in Eastern Europe. As policymakers re-evaluate the current landscape of digital payment solutions in Europe, the focus in Vilnius has moved beyond simple convenience. Lithuania, a nation of under 3 million, has realized that building a secure European payment infrastructure is no longer optional; relying on foreign systems is a strategic gamble they can no longer afford to take.

Edgars Lasmanis, the founder of the fintech company WALLETTO, puts it bluntly: “For us, this isn’t about hype. It’s about sovereignty, resilience, and real-world use cases.”

The Cost of Dependency

Currently, the Eurozone’s payment landscape is heavily skewed towards American tech giants. Without a domestic card scheme, Lithuania—and 13 other nations—funnel their daily transactions through Visa, Mastercard, Google, and Apple. This results in massive capital outflow, with the EU paying approximately €1 billion in fees to U.S. providers in 2022 alone.

However, the concern goes deeper than economics. It is about the fragility of connection. “We know what it means to be cut off,” explains Ingrida Simonaitytė, a cybersecurity consultant based in Vilnius. “We’ve seen what happens when infrastructure fails. Having your own payment system isn’t just nice — it’s national security.”

This sentiment is echoed by the business sector, which sees the current reliance on cables and foreign chips as a liability. “That kind of reliance on external infrastructure isn’t sustainable,” Lasmanis argues, “Especially when you consider that geopolitics now includes cables, chips, and payments.”

A Public Option for a Digital Age

The proposed digital euro is distinct from volatile cryptocurrencies or private stablecoins. It acts as a direct liability of the Eurosystem, designed to function alongside cash rather than replace it. Its primary selling points are universal accessibility, freedom from commercial data mining, and crucially, the ability to function offline.

During a recent address, ECB President Christine Lagarde described the vision clearly: “It’s designed to be neutral and foundational. A public option for digital money.” Furthermore, she emphasized the need for autonomy, stating that “A payments system should not be hostage to any one provider — or country.”

The Offline Advantage

Perhaps the most revolutionary aspect of the project—and the one most relevant to Lithuania’s security concerns—is the offline functionality. By utilizing secure chips in devices, the digital euro can facilitate peer-to-peer transfers without any internet or mobile signal.

Lisa Thompson, a researcher from MIT, highlights the significance of this feature: “This is where the innovation really lies. Offline capability breaks the dependence on real-time infrastructure. It’s closer to cash than any digital payment we’ve seen.”

For Lithuania, this is the failsafe required for a volatile geopolitical era. As Simonaitytė notes, “If the cable goes out, if there’s a cyberattack, if there’s another war — we need fallback options. That’s what the digital euro offers. Not speculation — resilience.”

Trust, Privacy, and the Private Sector

Despite the strategic benefits, the European Central Bank faces skepticism regarding privacy, particularly from cash-loving nations like Germany. The fear of state surveillance is palpable. However, proponents argue that the offline capability itself is the answer to these fears, as it leaves no digital trail.

“Trust has to be earned,” says Lasmanis. “That’s why the offline mode matters. If you can pay without a network, without a trail, then the system becomes credible.”

Rather than seeing the digital euro as a competitor, Lithuanian firms are preparing to build upon it. The central bank in Vilnius has already developed prototypes, and private companies are eager to integrate these new “rails” into their services. “The idea is not to compete with private companies,” clarifies Tomas Garbaravičius of the Bank of Lithuania. “It’s to give them the rails to build better services.”

WALLETTO is already looking ahead to this integration. “We already serve clients across the EEA,” Lasmanis notes. “If we can offer them digital euro capabilities — especially offline or instant settlement — it’ll be a game changer.”

A Global Divergence

While Europe accelerates, the United States remains hesitant. The Federal Reserve is treading carefully, balancing the potential benefits against political polarization and banking stability. “We’re watching Europe closely,” Michael Barr, the Fed’s Vice Chair for Supervision, admitted in 2024. “But any U.S. CBDC would require Congressional approval — and public trust.”

In contrast, Lithuania frames the digital euro not as a mandate, but as a democratic choice. “Nobody will be forced to use the digital euro,” Lasmanis emphasizes. “But people should be able to. Especially in a crisis.”

Ultimately, the drive for a digital euro in the Baltics is shaped by a pragmatic worldview that differs sharply from the theoretical discussions in Washington or Frankfurt. It is a view forged by history and geography.

As Lasmanis sums up, the philosophy driving this innovation is simple: “In the Baltics, we don’t ask if something is necessary. We ask: what happens if we don’t have it?”

The developers at Walletto envision a modular future—one where government aid, merchant payments, and instant transfers flow seamlessly through this new public infrastructure. “The future of money is modular,” Lasmanis concludes. “And the digital euro is one of those modules.”