The digital euro project comes to life. The European Central Bank (ECB) today announced the transition to the operational phase, after successfully completing the preparatory phase started in November 2023. A move that responds to the request of EU leaders to speed up the process, so as not to be left behind in the digital payments revolution.
Cost estimates published for the first time
Further details emerged today from the note from the European Central Bank. According to the ECB, the digital euro will be a tool to preserve citizens’ freedom of choice and privacy, as well as protecting Europe’s monetary sovereignty and economic security. The stated aim is to promote innovation and make payments on the continent more “competitive, resilient and inclusive”.
And for the first time we also talked about numbers. Total development costs are estimated at approximately €1.3 billion until 2029, with annual operating costs thereafter of €320 million. The ECB will bear these expenses, which will be compensated by the seigniorage proceeds. The costs that the banks will bear for services linked to the digital euro must be added to the calculation: between 4 and 6 billion euros, estimated by the ECB based on data provided by the institutions.
The calendar: we start (maybe) in 2029
The road, however, is not yet completely downhill. The ECB specified that the final decision on the issue will be taken only after the approval of the European regulation, currently under discussion. If the Brussels co-legislators give their approval in 2026, the timetable includes:
- the start of a pilot phase with the first experimental transactions in mid-2027;
- the first official issue of the digital euro will take place during 2029.
The preparation phase, started in November 2023 and expiring at the end of October, concluded successfully, according to the ECB. In the next one, while the companies selected to create services linked to the digital euro (such as apps and Open finance, on which Fabrick and Almaviva will work) the ECB will take care of the initial configuration of the system and the pilot activities.
No goodbye to cash
According to the ECB, the digital euro will be a tool to preserve citizens’ freedom of choice and privacy, as well as protecting Europe’s monetary sovereignty and economic security. The stated goal is to promote innovation and make payments on the continent more competitive, resilient and inclusive.
It will not retire cash, even if the ECB says its use will decline compared to digital transactions. Piero Cipollone, Member of the Executive Board of the ECB and President of the High Level Task Force for a Digital Euro, explains:
This is not just a technical project, but a collective effort to adapt the European monetary system to future needs. A digital euro will ensure that citizens enjoy the benefits of cash even in the digital age. It will strengthen the resilience of the European payments landscape, reduce costs for merchants and create a platform where private businesses can innovate, expand and compete.
The digital euro is good, but it must be totally public and free. This is what Massimiliano Dona, president of the National Consumers Union, says:
It must, like cash, be an entirely free public good, both for merchants and consumers. The public-private hybrid system that is emerging, however, would have costs that would then inevitably be passed on to final consumers, on the final prices of the goods and services they purchase.
