The European Central Bank is pushing to launch its digital euro by 2029, a move aimed at modernizing eurozone payments and asserting monetary independence in a rapidly digitizing global economy.
ECB officials are targeting the digital version of the euro for release in four years, contingent on the establishment of a robust legal framework. This timeline was reported by Bloomberg, citing individuals familiar with the confidential discussions.
The ambitious target comes as the current two-year preparatory phase for the Central Bank Digital Currency (CBDC) is set to conclude this month. The ECB’s Governing Council is expected to decide on the next steps following this phase.
However, preparatory work will continue, including the development of digital wallets and the integration of the digital currency with merchants and banks. Officials are meeting this week in Florence, Italy, to decide on proceeding with these efforts.
Piero Cipollone, a member of the ECB’s Executive Board, previously indicated “mid-2029” as a “reasonable assessment” for a launch date, provided political consensus is achieved within the European Union.
The digital euro is central to the ECB’s strategy to update payment systems across the eurozone. It aims to offer a sovereign and secure alternative to privately issued stablecoins, many of which are pegged to the U.S. dollar, and services offered by major payment providers like Visa or PayPal.
This initiative is intended to safeguard European monetary autonomy in a world increasingly reliant on digital transactions.
Key milestones achieved in the preparatory phase include the selection of technology providers, testing of offline and conditional payment functionalities, and the drafting of the scheme’s regulations. EU Finance Ministers have also agreed on limits for holdings to balance user adoption with financial stability.
Despite the optimism, the project faces ongoing challenges, notably ensuring user privacy, seamless interoperability with commercial banks, and robust cybersecurity. The ECB has consistently stated the digital euro will complement, not replace, physical cash, and will support payments even without an internet connection.
Europe’s push places it in the global race for CBDCs. China is already conducting large-scale pilots of its digital yuan, while the U.S. Federal Reserve is progressing with caution.
Mr. Cipollone has emphasized that the digital euro will “maintain control of your money, your options, and your future,” highlighting its role in empowering citizens. This commitment by the ECB aims to position the euro as a leading digital currency in the 21st century’s payment landscape.