The European Central Bank (ECB) is moving full steam ahead with its plans for a digital euro, with potential rollout slated for 2029. ECB President Christine Lagarde has described the digital euro as a "symbol of trust in our common destiny," emphasizing its potential to unify the European Union.
Lagarde announced that the Governing Council is entering the "next and final phase" of development. The digital euro is envisioned to complement traditional banknotes, extending the benefits of cash into the digital sphere and reducing reliance on physical notes. It would allow Europeans to make digital payments online or offline throughout the euro area.
The ECB's initiative follows a request from the European Council to "accelerate" the development of the central bank digital currency (CBDC) and release it as soon as possible. If the European Parliament approves the necessary regulations in 2026, a pilot program could begin in 2027, leading to a formal rollout across Europe in 2029.
The ECB is currently focusing on the technical aspects of the digital euro, developing the infrastructure needed for testing and deployment. This includes establishing the technical foundations, engaging with market participants, and providing technical advice to support the legislative process. External development costs until the first issuance are estimated to be around €265 million.
Piero Cipollone, ECB Executive Board member and chair of the High-Level Task Force on a digital euro, stated that the digital euro is "not just a technical project but a collective effort to future-proof Europe's monetary system". He believes it will ensure that people continue to enjoy the benefits of cash in the digital era, enhance the resilience of Europe's payment landscape, lower costs for merchants, and create a platform for private companies to innovate and compete.
However, the concept of a CBDC has faced criticism, particularly from cryptocurrency advocates who view it as conflicting with the principles of decentralized finance. Concerns have been raised regarding potential infringements on civil liberties and privacy due to the possibility of real-time monitoring of financial transactions. Some critics argue that a CBDC could lead to increased surveillance of financial activities. Proposals have even emerged from European lawmakers seeking to ban CBDCs and promote Bitcoin.
Despite the criticism, the ECB is committed to ensuring transparency and accountability throughout the digital euro project. The central bank supports the European Commission's proposal to reinforce the right to pay with cash alongside the digital euro. The digital euro is designed for everyday use and, according to an ECB analysis, would not harm financial stability, even in highly unlikely scenarios.
The ECB's work on the digital euro began in October 2020 with a report examining the potential issuance of a CBDC. The project's investigation phase ran from October 2021 to October 2023, studying design options and distribution models. The preparation phase, which concluded in October 2025, laid the foundations for issuing a digital euro. Key developments during this phase included the development of a draft rulebook, the selection of providers for the digital euro platform, and exploration of the digital euro's innovation potential.
