ECB to decide on digital euro launch by autumn

The European Central Bank (ECB) will decide on the creation of CBDC by the end of October, Christine Lagarde, the bank’s president, said, The Block.

She said that broad adoption of the digital euro still will not happen in the near future. She noted that the ECB is operating in an ‘accelerated’ mode, but the final answer to this question is still under discussion.

After the meeting of the governing council of the central bank, a “pilot phase of experiments and fine-tuning” is planned. Mass adoption of the technology is slated for 2027.

The main agenda on this issue is preserving the value of fiat money and its parity with the prospective CBDC.

In parallel with the ECB president, the Governor of the Bank of England, Andrew Bailey, expressed his view on the technology. He said wholesale CBDCs could be a “revolution in infrastructure, financial markets and trade finance”.

The central bank began studying the digital euro as far back as 2021. The initiative emerged in November 2019. In October 2020, the ECB published a comprehensive report on the topic. Lagarde forecast the appearance of CBDC in four years.

Announcing in May the development of a legal framework for a digital currency, ECB Executive Board member Fabio Panetta noted that its issuance would take roughly 3-4 years.

In June 2023, the European Commission put forward a legislative proposal that would establish the legal basis for a possible digital euro as a complement to cash. The CBDC would operate as an electronic wallet. Users would also be able to conduct offline transactions.

Earlier, the Swiss National Bank planned a “rapid” rollout of the wholesale national digital currency on the SDX exchange as part of a pilot project.