EU advances digital euro with privacy and 2029 target

EU lawmakers advance the digital euro framework, targeting a 2029 launch. The initiative features privacy safeguards, holding limits, and aims to complement cash while reducing reliance on foreign payment providers.

European lawmakers have taken a significant step forward in establishing the legal and regulatory framework for a digital euro. This move signals strong political support for a central bank digital currency (CBDC) that could be launched by 2029. Key parliamentary committees have approved draft legislation, ending a prolonged deadlock and aligning with the European Central Bank’s (ECB) timeline for pilot testing by mid-2027 and full issuance by 2029. The proposed digital euro is designed to function both online and offline, featuring privacy safeguards, holding limits, and a ban on interest payments. The framework aims to reduce reliance on foreign payment providers, standardize requirements across the eurozone, and ensure the digital euro complements, rather than replaces, cash. Lawmakers stress the importance of user privacy and payment choice, while banks and fintech firms are expected to handle distribution and access. The legislative process will continue with trilogue negotiations and further votes, marking a pivotal moment in European monetary policy.