The digital euro will soon be a reality. The European Central Bank has decided to proceed to the next phase of the project, with the launch of electronic money expected in 2029. An objective that could only materialize if the regulation is completed as scheduled and if the entire Eurosystem is ready.
What the European digital currency will look like
From physical to digital currency, therefore. But how will the new currency work? Let’s start with an example. It will no longer be necessary to go to an ATM or a designated public office counter, such as the Post Office. It will be necessary to create a digital wallet (wallets) of your bank, into which users can load the desired amount via a linked bank account. The cash can instead be loaded through the ATM which, through an operation, will divert it directly to the digital wallet. At this point the user can start paying with digital euros from their wallet. Digital euro payments would therefore be guaranteed – in physical shops, online, between private individuals – safe and instant.
The hypothesis currently being worked on by the ECB would be to establish a limit on the amount of digital euros that each natural or legal person could hold in their digital wallet, in order to avoid an excessive outflow of deposits from banks, which could compromise financial stability.
The steps to achieve the adoption of electronic currency
The confirmation came during the meeting of the Governing Council of the ECB, which was held in Florence, where it was decided to proceed to the next phase of the digital euro project. The ECB and the central banks of the euro area “will build the necessary technical capacity in view of the possible issuance which would take place during 2029”, reads the ECB’s technical document.
However, the Eurotower management has identified the next crucial steps for the adoption of the European digital currency. European legislators will have to adopt the Regulation on the establishment of the digital euro during 2026, then there will be a pilot exercise and the first transactions could take place as early as mid-2027. The entire Eurosystem should therefore be ready for a potential first issuance of the digital euro during 2029.
Why do you want to activate this payment system?
Fight against corruption, greater competition, financial inclusion and guarantee of privacy protection: the adoption of digital currency would bring with it several positive aspects. ECB President Christine Lagarde is convinced of this. “The euro, our common currency, is a reliable sign of European unity. We are working to make its most tangible form – euro cash – fit for the future, designing and modernizing our banknotes and preparing for the issuance of digital money”, explains the number one of the European banking institution. A digital euro, notes the ECB, will preserve the freedom of choice and privacy of Europeans and protect Europe’s monetary sovereignty and economic security.
