The European Central Bank (ECB) has been working for several years on the introduction of a digital version of the euro. This initiative aims to enhance the regulator’s control over the financial system, which is increasingly influenced by commercial banks and non-European payment platforms.
The rise of stablecoins, particularly those from the United States, is also a source of concern for the regulator. These stablecoins could potentially replace euro payments.
The digital euro is intended to help the central bank maintain control, following the trend set by cryptocurrencies like Bitcoin. Unlike cryptocurrencies issued by private entities, the digital euro will be issued by the ECB itself, ensuring it is not subject to external commercial influences.
If everything proceeds as planned, the first e-euro is expected to be available by 2029. Consequently, the ECB announced on Thursday that the project is entering its next phase.
This phase involves the development of the technology necessary for the implementation of the digital currency. A test is scheduled for mid-2027 as part of this process. Additionally, the ECB is collaborating with market participants, including banks and retailers, and is also engaging consumers in the rollout.
The ECB has been exploring the potential introduction of the digital currency since 2020 and anticipates significant work in the coming years. The central bank estimates the total cost of implementation to be around 1.3 billion euros. Furthermore, once the currency is launched, there will be an additional annual cost of 320 million euros.
However, it remains uncertain whether the European digital currency will actually be realized. The decision does not rest solely with the ECB; it also requires approval from the European Parliament and the EU member states, and their agreement is still unclear.
Not all European political factions and national governments are enthusiastic about the initiative. Right-wing parties, in particular, have expressed concerns regarding privacy. The plans have faced considerable criticism, with some experts questioning their utility and the specific problems the digital currency aims to address.
