Nikolas Sargeant
The European Central Bank has officially announced plans to advance its digital euro project into the next phase, targeting a potential launch by 2029. The central bank confirmed that if legislation is approved during 2026, pilot exercises could commence in 2027, positioning the Eurosystem for its first digital euro issuance within the next four years. The ECB has been exploring the digital currency concept since 2020 and entered its preparation phase in late 2023. As part of this phase, the ECB has signed framework agreements with seven technology companies, including fraud detection specialist Feedzai and security firm Giesecke+Devrient, to develop critical infrastructure such as AI-powered fraud prevention and offline payment capabilities.
The digital euro initiative faces considerable hurdles, particularly around securing legislative approval from European lawmakers who remain divided on the concept. The proposed legislation has been under consideration since 2023 but has encountered delays stemming from privacy concerns, political disputes, and the disruption caused by 2024 elections. ECB Board member Piero Cipollone recently projected that parliamentary consensus might be reached by May 2026.
Proponents argue that a digital euro would guarantee all European citizens access to free, universally accepted digital payment methods that could prove resilient during major crises such as conflicts or cyberattacks. European officials have also recently secured the main technology partners for the CBDC initiative. However, the project has encountered significant resistance from banks, member states, and the public, primarily centered on worries about privacy infringement and potential government overreach with a centrally controlled digital currency.
Globally, central bank digital currencies remain in early stages, with only three nations, Nigeria, the Bahamas, and Jamaica, having successfully launched active CBDCs, while 49 other countries are currently running pilot programs. The digital euro would represent one of the world's most significant CBDC implementations if it proceeds as planned.
