European Central Bank: Digital Euro to be launched in 2029, consensus on legislation by three major institutions required

The board member of the European Central Bank (ECB), Piero Cipollone, recently revealed for the first time the timetable for the launch of the digital euro. The official digital currency, which has been eagerly anticipated, is expected to be officially unveiled in 2029. However, the realization of this grand plan depends on whether the three major institutions of the European Union can complete the relevant legislative work by 2026, laying the legal foundation for subsequent technical and testing processes.

Digital Euro timetable unveiled: legislation first, technology takes three years

According to a report by Bloomberg, Cipollone emphasized on September 23 that the legislative process is the most critical part of the digital euro roadmap. The three major institutions, the European Parliament, the European Council, and the European Commission, must reach a consensus on all legal texts before 2026 to provide a clear legal framework for the technology of the digital euro.

Legislation is the cornerstone of our entire project," Cipollone said. “Only after the legal framework is established, can we initiate comprehensive technical and testing work.”

Once the legislation is completed, the European Central Bank will need about two and a half to three years to carry out comprehensive technical verification, including system architecture design, security testing, stress testing, and integration work with existing payment systems. This means that even if the legislative process goes smoothly, the digital euro will not be officially launched until 2029.

( The three strategic goals of the digital euro: the vision of coin beyond a payment tool

For the European Union, digital euro is far more than a new type of payment tool, but it is about the digital era of Europe's currency coin sovereignty and financial security. The EU has set three core goals for the digital euro:

)# 1. Financial Resilience

The digital euro will provide offline payment functionality, ensuring that European citizens can still maintain their basic transaction needs in extreme situations such as network disconnection or network attacks. This functionality is seen as an important guarantee for financial security in the digital age, and is a feature that traditional encrypted coins do not possess.

2. Inclusive Finance

The design team has made “anyone can use” a core principle, committed to a simple and intuitive user interface, allowing the elderly, people with disabilities, and those unfamiliar with digital payments to easily complete transactions. This goal reflects the EU's commitment to not leave anyone behind in the digital transformation process.

3. Currency Coin Sovereignty

Perhaps the most strategic significance is that the digital euro aims to establish a payment infrastructure that does not rely on non-European networks such as Visa and Mastercard, reducing Europe's dependence on external payment systems. EU finance ministers have reached a consensus on this legislative roadmap, seeing it as a key measure to safeguard Europe's financial sovereignty.

Technical Architecture and Operation Mode: Digital currency supported by the Central Bank

The digital euro differs fundamentally from decentralized cryptocurrencies such as Bitcoin in its technical nature. As a Central Bank Digital Coin (CBDC), the digital euro will be fully backed by the European Central Bank, with a value equivalent to physical euro, and subject to comprehensive regulation within the framework of the European Union law.

In practice, the public will open digital euro wallets through existing banks or payment institutions. These wallets are similar in function to current bank accounts, but will provide a more convenient, real-time cross-border transfer and small payment experience.

To reduce the potential impact on the banking system, the EU is discussing the concept of setting a 'wallet upper limit.' The initial idea is to limit each user's digital Euro holdings to 3,000 Euros to prevent massive outflows of bank deposits and ensure the stability of the financial system.

Challenges and Controversies: Privacy, Cost, and Market Positioning

Despite the Central Bank of Europe providing a clear timetable, the digital euro still faces many challenges and uncertainties in its development path:

· Balancing Privacy and Regulation

There is a division within the European Parliament on how to strike a balance between anti-money laundering regulation and user privacy protection. On the one hand, the digital euro needs to comply with strict anti-money laundering regulations; on the other hand, the expectations of European citizens for payment privacy cannot be ignored.

· Cost-benefit considerations

Maintaining the digital euro system will consume significant resources, and the European Parliament still has doubts about its cost-effectiveness. Critics question whether it is necessary to invest heavily in the digital euro when existing payment systems are relatively complete.

· Relationship with Commercial Banks

In terms of positioning, digital euro is it to assist or to divide the deposits and payment market of commercial banks, it is still a sensitive issue. Although the holding limit of 3,000 euros can alleviate the impact, the long-term impact of digital euro on the entire banking system is still difficult to predict accurately.

Global Central Bank digital coin competition: Europe positioning

The development of digital euro should also be understood in the broader context of the global Central Bank digital coin competition. China's digital renminbi has been piloted in multiple cities, the Federal Reserve is also actively researching the digital dollar, and countries such as Japan and the UK are also advancing their respective CBDC projects.

In this global competition, Europe has chosen a more cautious path - first legislation, then . Although this method may slow down the process, it helps to ensure that the digital euro can better balance technological innovation, financial stability, and user demand when it is launched.

If the European Central Bank can launch the digital euro as planned in 2029, it will be one of the regions among the major global economies to introduce CBDC relatively late. However, this “latecomer advantage” may also enable Europe to learn from the experiences of other countries and build a more mature digital currency system.

The development of digital Euro will be an important issue worth continuous attention, which not only involves payment innovation in Europe, but also will profoundly affect the digitalization process of the global financial system.