ECB Completes Technical Preparations for Digital Euro, Awaits EU Legislative Action
The European Central Bank (ECB) has announced that all technical preparations for the digital euro are complete, and it now awaits legislative action from the European Council and European Parliament following the European Commission's proposal for a retail central bank digital currency (CBDC) with legal tender status.
The digital euro is designed to be a widely usable public digital currency with legal tender, aiming to support financial stability, monetary sovereignty, privacy, inclusion, and a robust European payments infrastructure. It would represent a liability of the central bank, providing direct central bank claims rather than functioning as a private token.
ECB President Christine Lagarde has indicated that the decision on whether to adopt the digital euro now rests with lawmakers, who must assess the Commission's proposal and translate it into legislation or amend it. She noted that safeguards and system design have already been defined.
This push to finalize and implement the digital euro comes amid urgent shifts in United States cryptocurrency policy and stablecoin regulation, which have prompted Europe to emphasize monetary autonomy. Notably, U.S. actions have included former President Trump's opposition to CBDCs and an executive order prohibiting federal agencies from promoting CBDCs.
Policy discussions in Europe are moving from principle toward execution, involving pilot programs and a potential launch by the end of the decade.
Adding global context to the debate, the International Monetary Fund (IMF) has warned that private digital money, including stablecoins, could weaken domestic monetary policy and financial stability.
The proposed regulation for the digital euro is technology-neutral, and the digital euro is envisioned to operate alongside existing public blockchains such as Ethereum and Solana.
