European Central Bank Targets 2029 for Digital Euro Launch

European central bank pushes for CBDC launch in 2029: Report

The European Central Bank (ECB) is making strides toward introducing its digital euro, aiming for a launch by 2029 if a suitable legal framework can be established.

Key Takeaways

The ECB plans to launch a digital euro by 2029, contingent on legal agreements.
Preparatory work for the Central Bank Digital Currency (CBDC) is ongoing, with meetings scheduled in Italy.
Regulatory hurdles and differing opinions on the CBDC's viability continue to pose challenges.
Currently, only three countries have launched CBDCs, with many others still in testing phases.

According to a recent Bloomberg report, officials at the ECB are continuing to develop the groundwork for the digital euro as they enter the latter stages of their preparation phase, which is set to conclude this month. The ECB has been examining the feasibility of the digital euro since 2020 and officially entered the preparation phase in late 2023.

Preparatory discussions are set to take place this week in Italy, where ECB officials hope to finalize a legal framework by engaging with lawmakers over the next four years.

Ongoing Debate Among EU Lawmakers

Despite the ECB's ambitions, the development of a digital euro faces significant skepticism among banks, lawmakers, member countries, and prospective users, primarily due to concerns about privacy and associated risks. Legislation aimed at establishing the CBDC has been pending in the European Parliament since 2023 and has encountered delays tied to political issues and the upcoming 2024 elections.

In September, ECB board member Piero Cipolloni mentioned mid-2029 as a potential launch window. He expressed hope that the European Parliament would reach an agreement on the proposed digital euro by May 2026. Cipolloni emphasized that the digital euro would ensure that all Europeans have access to free, widely accepted digital payment options, even during major disruptions like wars or cyberattacks.

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Global Landscape of CBDCs

The Atlantic Council highlights that only three countries—Nigeria, the Bahamas, and Jamaica—have officially rolled out their CBDCs. Meanwhile, 49 other countries are currently in the pilot testing phase for their own digital currencies.

Research from the Human Rights Foundation, which released its CBDC tracker in November 2023, suggests that improved payment efficiency and enhanced financial inclusion could be significant advantages of implementing CBDCs. However, concerns such as potential privacy infringements and the risk of increased government corruption are highlighted as drawbacks.

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