The European Central Bank (ECB) is reportedly aiming to launch its digital euro in 2029, contingent upon the establishment of a legal framework. Officials involved in the central bank digital currency (CBDC) project will continue to develop the necessary infrastructure after the current preparation phase concludes this month, according to a Bloomberg report on Wednesday, which cited individuals familiar with the matter.
ECB officials have been examining the possibility of rolling out a digital euro since 2020, entering the preparation phase in late 2023 as part of their strategic planning. Preparatory work is anticipated to continue at a meeting scheduled for this week in Italy, with sources indicating a hope that lawmakers will agree upon and pass a legal framework within the next four years.
EU Lawmakers Grapple with Digital Euro's Viability
The digital euro project has encountered considerable skepticism from various stakeholders, including banks, lawmakers, member states, and end-users. Key concerns revolve around privacy issues and other potential risks associated with a CBDC.
Legislation pertaining to the digital euro has been under consideration by the European Parliament since 2023. The process has experienced delays attributed to political considerations and the 2024 elections.
In September, ECB Board member Piero Cipolloni indicated that the middle of 2029 could serve as a potential launch date. He also predicted that the European Parliament would likely reach a consensus on the digital euro by May 2026. Cipolloni emphasized that a digital euro would guarantee all Europeans access to free and universally accepted digital payment methods, even in the face of significant disruptions such as war or cyberattacks.
Global Landscape of Central Bank Digital Currencies
According to the American think tank, the Atlantic Council, only three CBDCs have been officially launched to date. The Atlantic Council's CBDC tracker identifies Nigeria, the Bahamas, and Jamaica as the only jurisdictions with an active digital token. Concurrently, another 49 countries are currently in the pilot phase of their CBDC development.
Information compiled by the Human Rights Foundation, which launched a CBDC tracker in November 2023, points to improved payment efficiency and expanded financial inclusion as potential advantages of CBDCs. However, the foundation also lists drawbacks such as the currency's potential to infringe on user privacy and create new avenues for government corruption, among other concerns.