TLDR
- ECB Executive Board member expects digital euro launch around mid-2029
- European Parliament approval remains the biggest hurdle for the project
- EU finance ministers agreed on digital currency holding limits in September
- Parliamentary position expected by May 2026 after October progress report
- Project has been in development since October 2020
The European Central Bank has pushed back its digital euro launch timeline to mid-2029, according to Executive Board member Piero Cipollone. Speaking at the Bloomberg Future of Finance event in Frankfurt, Cipollone said the delayed timeline reflects ongoing legislative challenges.
The digital euro project, first announced in October 2020, continues to face regulatory hurdles. Cipollone identified the European Parliament as the primary obstacle preventing faster progress on the central bank digital currency.
“The middle of 2029 could be a fair assessment,” Cipollone stated during his September 23 presentation. He praised discussions at the member-state level, describing them as progressing well with growing political alignment across Europe.
The ECB official highlighted a recent breakthrough with euro-area finance ministers. They reached agreement on customer holding limits for the proposed digital currency, creating new momentum for the stalled project.
Parliamentary Approval Process Underway
European Parliament legislation remains the critical bottleneck for digital euro development. Cipollone outlined the legislative timeline facing lawmakers in the coming months.
A European Parliament member will deliver a progress report on October 24. Following this milestone, lawmakers will have six weeks to propose amendments and five additional months for parliamentary debates.
Cipollone expects Parliament to establish its position on the digital euro by May 2026. He stressed the importance of achieving a general agreement among member states before the end of 2024.
EU finance ministers reached a compromise on the digital euro roadmap during September 19 meetings in Copenhagen. The agreement followed discussions with ECB President Christine Lagarde and European Commissioner Valdis Dombrovskis.
The compromise grants finance ministers input on currency issuance decisions and individual holding limits. Irish Finance Minister Paschal Donohoe said the deal creates opportunity for Council discussion before final ECB decisions.
Development Timeline Continues
The ECB completed its digital euro investigation phase in November 2023. The central bank then moved into a preparation phase scheduled to conclude by October 2025.
Following the preparation phase completion, the ECB will decide whether to advance to the next development stage. An ECB spokesperson confirmed that parliamentary progress reports will continue throughout the process.
Policymakers view holding limits as essential for addressing financial stability concerns. The limits aim to prevent deposit outflows from commercial banks when the digital euro launches.
The project has encountered resistance from multiple stakeholders. Banks, lawmakers, member states and potential users have raised privacy and implementation concerns about the proposed digital currency.
Supporters argue the digital euro could improve payment efficiency and reduce reliance on private payment operators. They also position it as competition against dollar-backed stablecoins gaining European market share.
The European Commission published legal proposals for the digital euro in June 2023. However, European Parliament progress has remained limited since the initial publication.
The digital euro represents Europe’s longest-running financial technology initiative, now entering its fifth year of development with launch still years away.
