I suspect that it will lose out against the Digital Euro.

I do think that GNU Taler is the better technical solution as the blind signatures and online model require less trust in the platform, while the Digital Euro requires untamperable hardware enclaves. So in an ideal world we would all standardize on GNU Taler and be happy.

Unfortunately, anything related to money is probably the place where trust paranoia is the least useful. In fact, widespread use of the Digital Euro will probably be the best proof for the security of the available hardware enclaves, similar to how Bitcoin is proof that SHA-2 is currently secure. Otherwise, somebody would make bank from counterfeiting in the few moments before the system crashes down.

The digital Euro has the real benefit to allow offline transactions. Both Digital Euro and GNU Taler have the psychological burden that you have to exchange "real money" for some kind of digital "monopoly money" which can get lost with no way to re-imburse you. (Which is the same as would happen with literal cash, but nobody will care about that.)

(Which is why I actually think both "digital cash" solutions will die out, with GNU Taler fading into obscurity, and Digital Euro being kept on life support as it is literally legal tender. And we will eventually all just be using Wero, which is just SEPA wire transfers in a trench coat)