EU agrees roadmap for launch of digital euro

Key points:

• The EU has agreed on a roadmap for the digital euro.
• Despite the agreement, the launch of the digital euro could take years.
• Some EU member states are concerned about the implications of introducing the token for privacy.

European Union finance ministers have agreed on key principles for a digital euro, which is intended to be a strategic alternative to Visa and Mastercard payment systems.

At meetings in Copenhagen, officials discussed how CBDC could function alongside commercial bank money and provide consumers and merchants with an online wallet issued under the Eurosystem’s balance sheet.

According to Reuters, the compromise agreement will allow EU ministers to express their position on the rules for issuing the digital euro, including limits on the amount of funds that citizens can hold in order to reduce the risk of a mass outflow of deposits.

European Central Bank (ECB) President Christine Lagarde noted:

“The digital euro is not just a means of payment, it is also a political statement concerning the sovereignty of Europe and its capacity to handle payment, including on a cross-border basis, with a European infrastructure and solution.”

Launch timeline

Despite the progress made, the launch of the digital euro could take years, the report says. The European Parliament has not yet considered the bill, with debates expected this fall. The ECB hopes to pass the law by June 2026, after which it could take up to three years to launch the euro.

Skeptics of CBDC adoption

Fernando Navarrete Rojas, a center-right EU lawmaker, published a paper earlier this year titled “Do we really need a digital euro?” in which he called the project a solution to a problem that no one asked for. He noted:

“Amidst the ECB’s shifting narrative, the possible risks associated with a digital euro, such as the destabilizing effect it could have on financial stability…data privacy concerns that have sparked significant public debate, and the allocation of additional responsibilities in areas such as fraud prevention and anti-money laundering (AML), should be carefully assessed.”

In August, officials were already discussing whether the digital euro should run on a public blockchain, such as Ethereum or Solana. Previously, it was assumed that a closed ledger controlled by the European Central Bank would be used.