ECB plans to complete preparatory phase of digital euro by October
Lawmakers have recently expressed concerns about a digital euro.
Author Camomile Shumba | Edited by Parikshit Mishra Updated Mar 10, 2025 16:01 UTC Published Mar 10, 2025 11:51 UTC
Important points:
- The ECB aims to complete the testing phase of the digital euro by October 2025.
- ECB council members are 'campaigning' with stakeholders to launch a digital euro.
- Some lawmakers expressed doubts.
European Central Bank President Christine Lagarde said the ECB hopes to complete the preparatory phase of a digital euro by October 2025. However, lawmakers have recently expressed doubts about the feasibility of a digital euro, Reuters reported on Monday.
Lawmakers are unsure whether the ECB can effectively manage a digital euro after an incident last month with the Target 2 (T2) payment system, which was unable to process transactions for an entire day. T2 handles large transactions. An ECB official said the digital euro would be similar to the TIPS instant payment system, which operates 24/7 and processes small transactions, according to a Reuters report.
“The recent error does not call into question the reliability of the euro's digital infrastructure, which is designed to ensure payments continue to function smoothly for users even if technical issues arise,” an ECB spokesperson said after the article was published.
The ECB is seeking to ensure the launch of a digital euro.
“Fabio Panetta on the board and then Piero Cipollone, who replaced Fabio, have taken over the leadership with a great team that is focused on accelerating the process and, hopefully, campaigning enough with all the stakeholders, including the European Parliament, the European Council, the European Commission, so that ultimately we can not just let this go, but implement a digital euro,” Lagarde said at a press conference on Friday.
An ECB spokesperson explained that the ECB intends to complete the preparatory phase of the digital euro by October. The preparatory phase began in November 2023. During this period, the ECB plans to conduct tests and discussions with various stakeholders, as well as develop a set of rules for the digital euro.
The EU Governing Council is expected to decide on the introduction of a digital euro after the relevant legislation is passed. The Governing Council includes Lagarde, Panetta and other members of the ECB executive board, as well as the governors of national central banks.
The digital euro, which would be the EU's central bank digital currency (CBDC) – a digital token issued by the central bank – has been controversial for years. Some countries, such as Spain, previously did not consider a digital euro necessary.
Lagarde stressed that its necessity is becoming increasingly urgent.
“I think it’s extremely important, and for those who are sceptical, it seems more important and necessary now than ever before, both at the wholesale and retail level,” Lagarde said.
If the EU decides to implement a digital euro, it would follow the example of countries such as the Bahamas, Jamaica and Nigeria, which have already launched their own central bank digital currencies (CBDCs), and depart from the position of the US, which has no plans to introduce one.
CORRECTION (10 March 2025, 15:45 UTC): Added comments from an ECB official clarifying Lagarde's comments about the October 2025 deadline.
