European Central Bank to ‘Accelerate’ CBDC Plans, Eyeing 2029 Digital Euro Rollout

The European Central Bank has been told to “accelerate” the process of developing the digital euro – a central bank digital currency, or CBDC– from the European Council. If the European Parliament passes the necessary regulations in 2026, then the digital euro will be piloted in 2027 and, if successful, formally implemented across Europe in 2029.

Christine Lagarde, president of the European Central Bank, announced via social media on Friday that the Governing Council is moving into the “next and final phase” of developing its CBDC. She explained that the digital euro is “important” as the European Central Bank aims to digitize cash, thus reducing reliance on physical notes.

“The European Council has asked us and everyone involved to speed up the process so that we can launch the digital euro as soon as possible,” Lagarde. explained. “This is a great project because the euro is our currency, your currency, it brings us together. It is a symbol of trust in our common destiny. So, we go with the digital euro in that next and final phase of the preparation.”

The digital euro is what many define as a CBDC, which is simply a digital form of a fiat currency. They are distinctly different from stablecoins, as they do not use public blockchains to settle transactions and are issued by central banks. In this case, the digital euro will not use digital ledger technology, although it will borrow “key design principles”.

Crypto enthusiasts have long opposed CBDCs, citing concerns about privacy, centralization and the potential for central banks to freeze funds. That said, stablecoin issuers like Tether and Circle can also freeze funds, and do so regularly when wallets are linked to hacks or hacks. other criminal activity.

The press office of the ECB did not respond Decryptthe request for comments regarding the freezing process for the digital euro.

In a blog postthe European Central Bank explained that the European Parliament needs to pass regulations on the establishment of the digital euro. If done during 2026, a “pilot exercise” and the first “initial transactions” could take place in mid-2027. This would prepare the digital euro for a formal release across Europe in 2029.

The European Central Bank estimates that the total development costs for the digital euro will be 1.3 billion euros, or about 1.5 billion $, until the first issue in 2029. The costs of subsequent operation are estimated at 320 million euros per year, or 369 million $.

Europe isn’t the only place tracking a CBDC. Russia, Chinaand India all have started their own respective CBDC pilots, meanwhile Nigeria has launched its eNaira in 2021. The United States, on the other hand, has banned the use of a CBDC in the country, via a executive order signed by President Trump in January, keeping a campaign promise.

CBDCs are often seen as potential rivals to stablecoins, which are crypto tokens that attempt to track the price of fiat currencies, often holding reserves. After the inauguration of Trump, the United States embraced stablecoins with the passage of the GENIUS stablecoin act. Plus, Trump’s support World Liberty Financial released its own stablecoin in 1 USD.

As a result, stablecoins are becoming a bigger business than ever with a total market capitalization of $307.4 billion, according to DefiLlama. It is worth noting that most of these tokens are tied to the US dollar, with Tether also putting a break. mint stablecoins backed by the euro in 2024 due to hostile regulators.