The European Central Bank (ECB) has announced it is entering the next phase of its digital euro project. After concluding a two-year preparation stage, the ECB will continue development, with a possible pilot phase set for 2027 and a full launch targeted for 2029. This timeline depends on the European Parliament passing the required legislation by 2026.
The project has been under discussion since 2020. According to the ECB, the goal is to offer a free, secure, and universally accepted digital payment method backed by the central bank.
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Privacy, Politics, and Regulation
Progress on the digital euro has been slowed by political disagreement and regulatory concerns. Lawmakers remain divided on whether the CBDC is necessary, while banks and civil groups have raised questions about privacy, security, and potential effects on commercial banking.
Privacy remains one of the main points of debate. The ECB says it will not access personal user data, and payments would remain confidential within legal limits. Critics, however, continue to express concern about surveillance and government control.
The legislation needed to enable the digital euro is still under debate in the European Parliament. The ECB has said that a final decision on issuing the currency will depend on whether this legal framework is agreed upon.
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What the Digital Euro Would Be
Unlike decentralized cryptocurrencies or public blockchain-based tokens, the digital euro would not use a blockchain for settlement. It would be issued and controlled by the ECB and designed to complement physical cash, not replace it.
The ECB’s plan includes offering offline payments, prepaid card options, and a user experience similar to existing mobile apps. The system would aim to function even during crises such as cyberattacks or power outages. The ECB has budgeted €1.3 billion for development through 2029, with estimated annual operating costs of €320 million.
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Next Steps
Christine Lagarde, President of the ECB, has stated that the digital euro is intended to ensure Europeans can continue to access public money in the digital age. The ECB will continue technical development while awaiting a legal decision from Parliament.
If regulatory approval is given by 2026, a pilot could begin the following year, with broader issuance planned for 2029. Until then, the digital euro remains a project in development rather than an active currency.
