The digital euro, first proposed in 2020, is now looking at a potential launch date of mid-2029.

“The middle of 2029 could be a fair assessment,” European Central Bank Executive Board member Piero Cipollone said this week. “We should arrive at a general approach, as they call it, an agreement among member-states by the end of the year.”

The ECB’s Governing Council began advance work on the digital euro, envisioning it as a digital currency issued by the central bank to supplement cash, not take its place. It entered a preparation phase in 2023, focusing on technical development and devising EU-wide legislation to ensure compliance with privacy and anti-money laundering rules. As of March, there was speculation that the digital euro might be ready by the end of the year.

Roadblocks Are Piling Up

But roadblocks continue to pile up. Many lawmakers question the necessity of the digital euro in the first place and remain skeptical that it would justify the costs involved.

The European Parliament must pass legislation to move the project forward, but it continues to drag its feet. The former central banker leading negotiations on the digital euro’s legal framework with Parliament, Fernando Navarrete, has long been a skeptic of digital currencies. Navarrete recently published a paper, “Do We Really Need a Digital Euro: A Solution to What Problem Exactly?”

A major obstacle has been disagreement among EU nations over how the digital euro should be issued and how much each resident should be allowed to hold. The latter is especially sensitive, as governments fear that unlimited CBDC holdings could trigger destabilizing bank runs.

Last week, EU finance ministers reached a potential compromise by agreeing to impose limits on digital euro holdings. For now, domestic officials will be allowed to set caps on individual holdings, though ministers emphasized that the Council of Ministers will have an opportunity to revisit the rules before they are finalized.

Concerns Over Privacy

The framework would allow the ECB to track ownership of digital euros, helping protect against fraud and money laundering. However, this has raised privacy concerns in countries such as Germany and the Netherlands, which are seeking safeguards against potential payment surveillance.

Discussions have also centered on whether banks should be allowed to charge for distributing digital euros, and how to ensure the currency remains compatible across various payment rails. The ECB has recommended that legislation require all payment services providers to support the digital euro.