The European Central Bank (ECB) has given a new boost to its ambitious project to create a digital euro. After successfully concluding the preparatory phase —which included initial technical tests—, the ECB Governing Council has approved the start of a new stage focused on developing the necessary technological and organizational foundations for a possible initial issuance in 2029.

The decision responds to the growing political and economic interest in modernizing European payment systems and adapting them to the digital environment. If the legislative proposal on the digital euro is approved by the Parliament and the Council of the European Union in 2026, the ECB expects to start a pilot program in mid-2027, aiming to achieve full operability two years later.

Three development axes: technology, collaboration, and legal framework

The Eurosystem has defined three priority areas for this new phase. First, the consolidation of the technical infrastructure, from designing the system architecture to creating a functional prototype. Second, the ECB will intensify cooperation with financial entities, businesses, and users to ensure that the digital euro is easy to use, secure, and compatible with existing payment systems. Finally, the institution will continue providing technical support to the legislative process that will define the regulatory framework for the new monetary instrument.

The ECB President, Christine Lagarde, highlighted the strategic relevance of the project: "The digital euro is not intended to replace cash, but to complement it," she noted. Lagarde emphasized that, given the decline in cash payments, it is essential to offer a public digital alternative that combines accessibility, privacy, and reliability.

Costs, benefits, and social role of the digital euro

The ECB estimates that the development of the project until 2029 will require an investment of approximately 1.300 million euros. The annual operational maintenance could amount to about 320 million, although these figures would be offset by the revenues derived from monetary issuance, similar to cash production.

During the preparatory phase, the ECB selected providers of technological components and created testing environments in collaboration with the financial sector. The results were positive: experts concluded that the digital euro is compatible with current infrastructures and could enhance competition in the European payments market.

In addition, perception studies conducted among consumers and small businesses revealed a high interest in having a secure, simple, and accessible digital payment method for all. The ECB believes that this support reinforces its commitment to creating a tool that promotes innovation, protects the most vulnerable users, and guarantees European monetary sovereignty in the digital age.

Author: Margarida Raposo