The Governing Council of the European Central Bank (ECB) has decided to move to the next phase of the digital euro project. This decision follows the successful completion of the preparation phase, launched by the Eurosystem in November 2023, which laid the foundations for issuing a digital euro.
The Eurosystem will implement its preparations “flexibly”, in line with calls from euro area leaders for the Eurosystem to be ready for a potential digital euro issuance as soon as possible, while also recognizing that the legislative process has not yet been completed.
The final cost of a digital euro – for both its development and operation – will depend on its final design, including components and related services that need to be developed. As a result of the work done in the preparation phase, the total development costs, comprising both externally and internally developed components, are estimated at around €1.3 billion ($1.5bn) until the first issuance, which is currently expected during 2029. Subsequent annual operating costs are projected to be approximately €320 million per year from 2029 and would be paid by the Eurosystem.
The ECB Governing Council‘s final decision on whether to issue a digital euro, and on what date, will only be taken once the legislation has been adopted. Under the assumption that European co-legislators will adopt the regulation on the establishment of the digital euro in the course of 2026, a pilot exercise and initial transactions could take place as of mid-2027. The whole Eurosystem should then be ready for a potential first issuance of the digital euro during 2029.
“The euro, our shared money, is a trusted sign of European unity,” said ECB president Christine Lagarde, in a statement. “We are working to make its most tangible form – euro cash – fit for the future, redesigning and modernizing our banknotes and preparing for the issuance of digital cash.”
The Eurosystem will focus on three main areas:
- technical readiness: developing the digital euro’s technical foundations, including initial system set-up and piloting;
- market engagement: collaborating with payment providers, merchants and consumers to finalise the rulebook, conduct user research and test the system through pilot activities;
- legislative process support: continue providing technical input to EU co-legislators and assist the legislative process as required.
“This is not just a technical project but a collective effort to future-proof Europe’s monetary system,” said Piero Cipollone, ECB Executive Board member and chair of the High-Level Task Force on a digital euro, in a statement. “A digital euro will ensure that people enjoy the benefits of cash also in the digital era. In doing so, it will enhance the resilience of Europe’s payment landscape, lower costs for merchants, and create a platform for private companies to innovate, scale up and compete.”