TLDR
- ECB targets mid-2029 for a digital euro launch to reduce reliance on Visa and PayPal.
- The European Parliament’s decision on the digital euro could come by May 2026.
- Over 130 countries are developing CBDCs, with China’s digital yuan leading the way.
- ECB faces final hurdles with the European Parliament before the digital euro rollout.
The European Central Bank (ECB) has announced its target date for launching the long-awaited digital euro by mid-2029. According to Piero Cipollone, an executive board member of the ECB, recent developments in discussions with eurozone finance ministers show positive momentum for the project. The digital euro aims to be a fully digital version of the euro currency for daily transactions.
The ECB’s move to accelerate the digital euro project comes amid growing concerns about the increasing dominance of firms like Visa and PayPal in the region’s retail payment systems. Additionally, there are concerns about the rise of dollar-backed stablecoins, particularly those championed by figures such as Donald Trump, which may threaten the eurozone’s financial sovereignty. The digital euro would provide a state-backed alternative to these payment systems.
Key Breakthrough and EU Legislative Roadblocks
One of the major breakthroughs in recent discussions is the agreement among eurozone finance ministers to set customer holding limits for the digital euro. This agreement signals significant progress, but the next crucial step is legislative approval from the European Parliament.
The European Parliament must pass legislation to support the digital euro’s launch. While discussions at the member-state level are progressing smoothly, the biggest obstacle remains the legislative process. Cipollone indicated that, after an October 24 progress report, the Parliament will have six weeks to propose amendments and five months for further discussions. Cipollone expressed optimism that the Parliament could have a position on the project by May 2026.
“We should arrive at a general approach by the end of this year,” Cipollone said, noting that an agreement among member states is expected by December 2025.
Global Digital Currency Developments and ECB’s Position
The digital euro project is part of a broader global trend toward central bank digital currencies (CBDCs). More than 130 countries are currently exploring or developing their own CBDCs. China’s digital yuan, which has already processed billions of transactions since its launch in 2020, is seen as a global leader in this space.
The ECB’s digital euro is designed to compete with such global efforts while ensuring privacy and compliance with anti-money laundering regulations. The ECB started its preparation phase for the digital euro in late 2023, which involves both technical development and consultations with the EU to ensure the project complies with relevant laws.
In addition to the digital euro, the ECB is also working on frameworks that would ensure privacy and safeguard against illicit activities in the digital currency space. The ECB’s initiative represents a major step in Europe’s attempt to reshape its financial landscape and adapt to the growing digital economy.
