Digital Euro Project Moves to Lawmakers later than ECB Completes Preparatory Work
The European Central Bank (ECB) has officially finished the heavy lifting on its digital euro project, signaling that the technical foundation is ready.
Speaking at the final press conference of 2025, President Christine Lagarde confirmed that the bank has concluded its preparatory phase, effectively handing the baton to European lawmakers to decide if—and how—the currency will become a reality. significantly, the ECB stressed that completing the preparatory work does not amount to a , which remains a political choice.
Handing Over the Reins to Lawmakers
The shift marks a major turning point for , moving it out of the central bank’s labs and into the political arena. Over the last two years, the ECB has been busy designing the architecture, selecting technology providers, and drafting a “rulebook” to ensure the digital currency would work seamlessly across all 20 eurozone countries.
Now, the project’s future depends on the European Parliament and the European Council passing the necessary legislation. That process builds on a legislative proposal , which lays out the legal basis, secureguards, and limits for a potential digital euro.
President Lagarde used a down-to-earth metaphor to describe the current status, emphasizing that while the central bank has built the system, it lacks the legal authority to flip the switch.
“We have done our work, we have carried the water,” Lagarde told reporters. “It is now for the European Council and certainly later on for the European Parliament to identify whether the Commission proposal is satisfactory and how it can be transformed into a piece of legislation.”
Building a Digital securety Net
The ECB isn’t just looking to modernize for the sake of it; officials view the digital euro as a way to protect Europe’s financial independence. With more people moving away from physical cash, there is a growing concern that European payments are becoming too dependent on non-European private companies.
The digital euro is being designed to act as a digital anchor, offering a public alternative that works just like cash but in a digital wallet. ECB officials have repeatedly emphasized that the digital euro would coexist with physical cash and commercial bank money, not replace them.
Privacy has also emerged as a central political issue. The ECB says the system would allow cash-like privacy for offline payments, while still complying with anti-money laundering and counter-terrorism financing rules for online transactions. If lawmakers can agree on the rules by the end of 2026, the project will move into a pilot phase where real people can begin testing it. The current goal is to have the digital euro ready for the public by 2029.
The push comes amid growing competition from U.S.-based card networks, large Tech payment platforms, and dollar-backed stablecoins, which ECB officials view as a strategic risk to Europe’s monetary sovereignty. However, parts of the banking sector have raised concerns that a poorly designed digital euro could lead to deposit outflows from commercial banks, a risk lawmakers are expected to address through holding limits and design secureguards.
It’s meant to be a backup that keeps the economy stable, even during technical outages or cyberattacks, ensuring that everyone in Europe always has a reliable way to pay.
