ECB President Christine Lagarde Targets October to Finish Digital Euro
The European Central Bank (ECB) plans to launch the digital euro, with the testing phase set to end by October 2025. ECB President Christine Lagarde and her team are working with stakeholders to move the project forward, despite concerns from lawmakers and the public.
Digital Euro on Track for 2025
Lagarde confirmed at the press conference on March 6 that the ECB aims to complete the preparation phase by October 2025. This phase, which started in November 2023, involves testing, discussions with stakeholders, and the creation of a rulebook for the digital currency.
“The European Union is looking to launch the digital euro, our central bank digital currency (CBDC), by October this year,” Lagarde said during the conference, adding:
“We are working to ensure that the digital euro coexists with cash, addressing privacy concerns by making it pseudonymous and cash-like in nature.” The ECB believes the digital euro will improve payment efficiency and provide a secure, government-backed alternative to private digital payment methods. Board members Fabio Panetta and his successor Piero Cipollone are leading efforts to accelerate progress and secure support from the European Parliament, European Council, and European Commission.
Lawmaker Skepticism and Concerns
Despite Lagarde’s confidence, some EU lawmakers remain doubtful. A Reuters report from March 10 suggests many question the feasibility and necessity of a CBDC. Concerns include government overreach, data privacy, and the challenge of integrating the digital euro into the financial system.
A recent outage in the ECB’s Target 2 (T2) payment system has added to these doubts. T2, which processes large transactions, failed for over 2 hours on Feb. 27. Some lawmakers worry that similar technical issues could undermine trust in the digital euro, according to Reuters.
ECB officials reassured the public that the digital euro would function like the existing instant payments system, TIPS, which operates 24/7 and handles smaller transactions. While the TIPS system experienced only minor delays during the outage, securing lawmaker approval remains a significant hurdle for the ECB’s digital euro rollout.
Fears of Government Control and Tracking
Critics of the CBDC also fear that the digital euro could allow governments to track and control transactions. They argue that financial autonomy and privacy are at risk and call the digital euro a “dictatorship.”
Lagarde insists that the digital euro will not replace cash, but will serve as an additional option, with privacy protections to prevent government tracking. “I think it is critically important, and for the agnostics or the sceptics, it now seems more relevant and more imperative than ever before, both on the wholesale and on the retail level,” Lagarde said.
Global Approaches to CBDCs
Countries are taking different approaches to digital currencies. The European Union supports a centralized digital currency, while US President Donald Trump strongly opposes CBDCs, citing concerns about government control. Other countries, such as Brazil, have already launched digital currency pilots. However, security and privacy concerns still exist. In 2023, Brazil’s central bank released the source code for its CBDC. Within days, experts found built-in mechanisms that allowed authorities to freeze or reduce user funds.