In brief
- The ECB said Thursday it has finished technical preparations for a digital euro and awaits legislative action.
- EU lawmakers are reviewing a Commission proposal to authorize a retail CBDC with legal tender status.
- The push has gained urgency as stablecoins and U.S. crypto policy have reshaped global payments.
European Central Bank officials said Thursday the institution is ready to roll out a digital euro after completing technical and preparatory work, confirming at this year’s final press conference that a review of the project is underway, with the European Council and the European Parliament participating.
“We have done our work, we have carried the water, but it’s now for the European Council and certainly later on for the European Parliament to identify whether the Commission proposal is satisfactory, how it can be transformed into a piece of legislation or amended,” ECB President Christine Lagarde said in a statement.
As officials stress that the systems are built and the safeguards defined, attention has shifted to the political process required to authorize issuance.
Designed as a public, widely usable digital currency with legal tender status, the proposed digital euro is intended to support financial stability, monetary sovereignty, privacy, and inclusion, while strengthening Europe’s payments infrastructure.
Its purpose as a retail central digital bank currency is to “ensure that central bank money with the status of legal tender remains available to the general public, while offering a state-of-the-art and cost-efficient payment means,” the proposal reads, adding it could provide “a high level of privacy in digital payments.”
A retail CBDC is a digital form of public money issued by a central bank and backed by the state, with the same legal standing as cash. Unlike stablecoins, it’s a direct claim on the central bank, not a private token backed by reserves or corporate guarantees.
“Our ambition is to make sure that in the digital age, there is a currency that is the anchor of stability for the financial system,” Lagarde said.
Decrypt has reached out to the ECB for comment.
Necessity and urgency
In January, European Central Bank executive board member Piero Cipollone stressed the need for a digital euro in response to the Trump administration’s then-developing plans for a stablecoin policy aimed at strengthening the U.S. dollar.
Shifts in U.S. crypto policy and a more permissive stance toward stablecoins added urgency to European discussions about monetary autonomy, with Cipollone saying lawmakers and the broader political world are “becoming more alert” to the conversation.
Early efforts by U.S. lawmakers culminated when President Donald Trump signed the GENIUS Act into law in July.
Notably, Trump has consistently taken a hostile stance toward central bank digital currencies, saying in early 2024 that he would “never allow” a CBDC because he believes it would give the government too much control over people’s money.
He signed an executive order in January prohibiting federal agencies from establishing, issuing, or promoting CBDCs, effectively halting U.S. CBDC development under his administration.
Discussions on the weight of a public digital currency began as early as 2021, when European central bankers warned that failing to issue could leave monetary control to private or foreign payment systems as cash usage declines.
Policymakers have also examined how the digital euro fits alongside public blockchains such as Ethereum and Solana. “The proposed regulation on the digital euro is technology neutral,” an ECB spokesperson told Decrypt at the time.
Debate has since moved from principle to execution, with European institutions pressing for more apparent timelines around pilots and a possible launch toward the end of the decade.
Earlier this month, the IMF warned that private digital money, including stablecoins, could weaken domestic monetary policy and financial stability.
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