The European Central Bank (ECB) may postpone the launch of the digital euro beyond 2029 if the European Union delays adopting the necessary legislation. Meanwhile, pilot testing of the new digital currency is scheduled to begin in 2027.
The warning came from ECB Executive Board member Piero Cipollone, who addressed members of the European Parliament. He urged lawmakers to finalize the digital euro legislation by the end of 2026, warning that further delays could disrupt the planned launch schedule.
The European Parliament adopted its negotiating position on the legislation in July, but EU institutions have yet to reach a final agreement. The proposed rules include personal data protection measures, limits on individual digital euro holdings, and free basic payment services for consumers.
The digital euro is intended to provide an additional way to pay for goods and services across the euro area, including without an internet connection. The ECB hopes its own digital currency will help Europe reduce its dependence on foreign payment systems.
Testing will begin in 2027
Despite the legislative challenges, the ECB is continuing its technical preparations. In the second half of 2027, the central bank plans to launch a 12-month pilot program.
The tests will involve 36 payment service providers, employees of the ECB and 19 national central banks, as well as selected merchants. Participants will test person-to-person transfers, online purchases, and payments in stores. The trial version of the digital euro will not yet have legal tender status.
European banks develop their own stablecoins
While the ECB awaits legislative approval, European banks are preparing alternative digital payment solutions. For example, Qivalis, a consortium of 37 banks from 15 countries, received authorization from the Dutch central bank in October to operate as an electronic money institution.
Qivalis plans to issue its own euro-pegged stablecoin after meeting additional requirements under the European Union's Markets in Crypto-Assets Regulation (MiCA). Unlike the digital euro, which would be issued by the ECB, this token would represent a liability of a private issuer.
The ECB Governing Council will make its final decision on issuing the digital euro only after the necessary legislation has been approved.
Why the Bitcoin community opposes CBDCs
Many Bitcoin supporters strongly oppose central bank digital currencies (CBDCs), viewing them as tools that could increase government control over people's finances. Unlike cash, such currencies could potentially allow authorities to track payments, restrict certain transactions, and freeze funds. Critics fear that governments could gain the power to control not only how money moves but also what people are allowed to spend it on.
Another concern involves programmable money that could theoretically have an expiration date. For example, a government could issue a digital currency that must be spent within three months or become invalid. However, the ECB has officially ruled out this possibility for the digital euro. The regulator maintains that the new currency will not be programmable and that its use cannot be restricted to specific goods, services, or time periods.
As a reminder, the ECB president has confirmed plans to develop a digital euro.
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