The digital euro will not be available before 2026, at the earliest

EU citizens are unlikely to get their hands on a digital euro until 2026 at the earliest, as the European Central Bank examines other design and distribution considerations.

In a document on the progress of the initiative, the ECB indicates that a number of steps will have to be taken before a digital euro can be introduced, including an analysis of how financial intermediaries could provide front-end services, how currency would be distributed to users and how payments would be settled.

A particular sticking point appears to be offline usage, in which transactions are validated on a peer-to-peer basis, as opposed to online verifications performed by individual banks. “Time to market for this solution is more uncertain,” the ECB says. “The development of a third-party validated solution for online payments should not be delayed in the event that the timely delivery of a peer-to-peer validated solution for offline payments proves unfeasible.”

EU central banks say the Governing Council will decide in autumn 2023 whether to launch an “implementation phase” to develop and test the appropriate technical solutions and business arrangements needed to deliver a digital euro.

“This phase could last about three years,” said the central bank. “A decision on the possible issuance of a digital euro can only be taken later, also depending on legislative developments concerning a regulation to establish and govern the essential aspects of the digital euro which will be discussed by the European Parliament. and the Council of the EU, to a proposal from the European Commission.”

In an update for lawmakers, ECB board member Fabio Panetta said policymakers would soon start working on a regulation for the digital euro system.

“Having a set of rules in place at an early stage is crucial so that the market can develop digital euro solutions and be ready if and when a digital euro is introduced,” he said.

Panetta has faced a series of questions from the public over the decision to select Amazon to help develop a prototype digital euro, with lawmakers worrying about privacy issues, the company’s American roots and its market dominance.

In response, Panetta reiterated that the prototype being developed had little bearing on future plans for wider participation in the project.

“We will work with different stakeholders – intermediaries, consumers and retailers – so they can contribute their perspective and expertise as the program develops,” he said.

Comments are closed.