- EU finance ministers have reached a compromise on the digital euro project, which gives them direct input on the currency’s issuance and holding limits.
- The project, led by the ECB and seen as a way to reduce reliance on U.S.-based payment systems like Visa and Mastercard, is designed to function as an online wallet connected to the Eurosystem balance sheet.
- Despite the recent progress, a full launch is still years away. Legislation is not expected to be in place until mid-2026, followed by an estimated 36-month development period, meaning the digital euro may not be live until late 2028 or 2029.
EU finance ministers have advanced talks on the proposed digital euro this week, securing a compromise that would give them direct input on issuance and holding limits.
The agreement was reached in Copenhagen with ECB President Christine Lagarde and European Commissioner Valdis Dombrovskis, and is primarily designed to calm fears that the project could drain commercial bank deposits.
The digital euro would work essentially as an online wallet app connected to the Eurosystem balance sheet from the ECB. That means it would reduce the reliance on US-based payment systems like Visa and Mastercard.
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The Setbacks
Lagarde described the project as both a financial tool and a political statement, saying it would strengthen European sovereignty in payments infrastructure. Skepticism within EU institutions persists.
But Fernando Navarrete Rojas, an European Parliament deputy and economist at Bank of Spain, questioned the necessity for a digital euro and warned of risks to financial stability, data privacy, and regulatory burdens. In an extensive policy paper, he labeled the project a “solution to a problem no one asked for.”
In any case, the thing is that… it would take some time. First of all, the digital euro legislation was proposed in mid-2023, but disputes from banks, legislators, and politicians have slowed down progress. If that’s not bad enough, the ECB has targeted June 2026 for legislation to be in place.
On top of that, if approved, the ECB expects the system to take around 36 months to be developed and launched, so we can see it around 2028 – 2029, maybe.
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