EU finance ministers have reached an agreement on the "digital euro," but the European Central Bank warns that it "may take 5 years to go live."

According to a report by Reuters, EU finance ministers have reached an agreement on the roadmap for the digital euro and the procedure for ministers to express their opinions on whether to launch and hold restrictions. This significant development marks a critical step forward in the European Central Bank's digital currency (CBDC) plan, but experts warn that despite the agreement, the actual issuance of the digital euro may still take several years.

EU finance ministers reach key consensus on digital euro

Last week, EU finance ministers reached a further common position on the Central Bank Digital Currency (CBDC) planned by the EU—the digital euro—viewing it as a strategic alternative to US-dominated payment channels such as Visa and Mastercard.

The latest initiative stems from the Copenhagen ministerial conference, where officials discussed how the digital euro would work alongside commercial bank money while providing consumers and merchants with online wallets issued based on the euro system's balance sheet.

According to a recent report by Reuters, EU finance ministers, European Central Bank President Christine Lagarde, and European Commission Commissioner Valdis Dombrovskis have reached a compromise agreement that will give EU ministers a say on whether to issue a digital euro and how much digital euro each EU resident can hold, in order to alleviate concerns about bank runs.

Lagarde: The Digital Euro Concerns European Sovereignty

Lagarde stated at the press conference: “The digital euro is not just a means of payment, it is also a political statement about European sovereignty and its handling of payment capabilities (including cross-border payments), as well as Europe’s infrastructure and solutions.”

This statement highlights the geopolitical significance of the digital euro initiative, especially against the backdrop of the accelerating competition in global Central Bank digital currencies. The digital renminbi has already entered a large-scale testing phase, while the United States is also actively exploring the possibility of a digital dollar.

Long implementation timeline and political barriers

The report states that despite progress, the issuance of the digital euro may still take several years. The European Parliament still needs to approve the legislation, with related debates expected to intensify this autumn. According to Reuters, the European Central Bank hopes to complete the legislation by June 2026, after which the institution may need up to three years to issue the euro.

This means that even if everything goes according to plan, the European public may have to wait until 2029 to use the digital euro, a timeline that is far behind the Central Bank digital currency plans of other major economies.

Internal opposition voices are rising increasingly

The digital euro also faces threats from Spanish center-right EU lawmaker Fernando Navarrete Rojas. Rojas currently serves as the rapporteur for the digital euro document, and he has expressed skepticism about the program. Earlier this year, Navarrete published a lengthy 27-page paper titled “Do We Really Need a Digital Euro?” In the paper, the lawmaker describes the digital euro as a solution to a problem that no one has asked to be solved.

Navarette recently wrote: “In the constantly changing narrative of the European Central Bank, the risks that the digital euro may bring, such as its potentially destructive impact on financial stability… the data privacy issues that raise significant public debate, as well as the additional responsibilities in areas like fraud prevention and anti-money laundering, should be carefully assessed.”

Future Outlook of Digital Euro

With the consensus reached by EU finance ministers, the digital euro project has officially entered the next stage. However, the project still faces numerous challenges, including legislative approval, technical implementation, privacy protection, and integration with the existing financial system.

For participants in the cryptocurrency market and fintech companies, the EU's progress in the Central Bank digital currency space is worth close attention, as it may have far-reaching impacts on the future payment ecosystem and digital asset regulation.