The ECB says, once legislation is passed in the course of 2026, a pilot of the proposed digital euro could take place by mid-2027, with issuance in 2029.
The Governing Council of the European Central Bank (ECB) says it has decided to move to the next phase of the digital euro project, something many Europeans feel is vital for Europe’s financial autonomy in an era of US dominance in credit cards and stablecoins.
“The decision follows the successful completion of the preparation phase, launched by the Eurosystem in November 2023, which laid the foundations for issuing a digital euro,” according to yesterday’s (30 October) statement.
Euro area leaders had been calling for acceleration of progress on the digital euro, asking that the Eurosystem be ready for a digital euro issuance as soon as possible, notwithstanding the fact that legislation is not finalised.
A digital euro would be what is known as a CBDC (Central Bank Digital Currency), something that has been explored in many countries including in the US where it has long been mooted by the Federal Reserve, although under the current US administration the stablecoin model has been prioritised.
The ECB said yesterday that any final decision on whether to issue a digital euro, and on what date, will only be taken once the legislation has been adopted. Assuming that European legislators adopt the regulation on the establishment of the digital euro in the course of 2026, a pilot exercise could be in place by mid-2027, said the ECB, with full issuance in 2029.
“The euro, our shared money, is a trusted sign of European unity,” said ECB president Christine Lagarde. “We are working to make its most tangible form – euro cash – fit for the future, redesigning and modernising our banknotes and preparing for the issuance of digital cash.”
As cash payments continue to dwindle and digital transactions soar, the ECB also pointed out it would continue to support the European Commission’s proposal to reinforce the right to pay with cash, in parallel with the digital euro project, which would be “complementary to cash”.
The Eurosystem will focus on three main areas: technical readiness, market engagement and legislative process support. The latter will see the ECB continue to provide technical input to EU co-legislators and assist the legislative process as required.
“This is not just a technical project but a collective effort to future-proof Europe’s monetary system,” said ECB executive board member Piero Cipollone, who chairs the High-Level Task Force on a digital euro.
“A digital euro will ensure that people enjoy the benefits of cash also in the digital era. In doing so, it will enhance the resilience of Europe’s payment landscape, lower costs for merchants, and create a platform for private companies to innovate, scale up and compete.”
While the ECB says the final cost of a digital euro will depend on its final design, it estimates development costs at around €1.3bn up to the first issuance – expected in 2029 – while operating costs were estimated at around €320m per year from 2029. As a ‘public good’, the Eurosystem will bear these costs.
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