ECB Plans to Continue Digital Euro Development
The European Central Bank (ECB) will continue its work on the digital euro after the current preparation phase ends this month. A possible launch is targeted for 2029.
Officials will meet this week in Florence, Italy, to decide on extending the preparatory phase. The extension depends on whether the European Union can agree on a legal framework for the digital currency.
Political Challenges Delay Digital Euro Progress
The ECB began the project’s preparation phase in 2023. It hoped the European Parliament and national governments would have passed the required laws by now. However, disagreements among lawmakers have stalled progress.
The European People’s Party opposes the plan, preferring private companies to create digital payment options instead of the central bank. This delay worries officials who say Europe relies heavily on American firms like Visa, Mastercard, and PayPal.
Officials believe a European digital currency would give the region greater control over its financial system.
Concerns Over U.S. Stablecoins Accelerate Efforts
There is growing concern that dollar-backed stablecoins could gain popularity in Europe. This has increased pressure to develop the digital euro faster. ECB President Christine Lagarde has called for quicker progress.
ECB Executive Board member Piero Cipollone said, “the middle of 2029 could be a fair assessment” for the digital euro’s launch.
The digital euro project has progressed through stages. It started with a two-year investigation phase and then moved into the current preparation phase. The ECB is working on both retail and wholesale versions of the digital currency.
In July, the ECB approved a plan to allow distributed-ledger-technology (DLT) transactions to settle using central bank money. This step aims to integrate blockchain systems into Europe’s financial infrastructure.
