The European Central Bank (ECB) is prepared to officially commence the preparation phase for the digital euro, with a start date of November 1, 2025.
During this two-year period, the ECB will concentrate on finalizing the design and operational framework of the digital euro.
Speaking to Reuters on February 6, 2025, ECB Executive Board Member Piero Cipollone indicated that the development of US stablecoins has created additional urgency for the digital euro initiative. He expressed concerns about the risk US stablecoins pose to European banks, suggesting that if Europeans start using them for transactions, deposits could shift from Europe to the US.
“If people in Europe start to use stablecoins to pay, given that most of them are American and dollar-based, they will be transferring their deposits from Europe to the US,” he stated.
Key Timelines
- The multi-year central bank digital currency (CBDC) project began in October 2023. Cipollone noted, “The political world is becoming more alert to this… and we may see an acceleration in the process.”
- EU lawmakers are expected to report on the CBDC project progress by the summer.
Diverse Perspectives French MEP Sarah Knafo advocates for Bitcoin and opposes the EU’s digital euro plans. During a parliamentary session, she warned that the digital euro could lead to more state control over individual finances, arguing in favor of a strategic national reserve of Bitcoin.
Meanwhile, ECB President Christine Lagarde stated on January 30, 2025, that the euro’s central banks will prioritize liquid, secure, and safe reserves, which rules out Bitcoin.
Lastly, Senator Cynthia Lummis is supporting a proposal to convert parts of the US Treasury’s gold holdings into Bitcoin as a strategic reserve, amidst discussions among various states about establishing their own Bitcoin reserves.
Conclusion
The ECB aims to strike a balance between innovating with the digital euro while keeping stability and consumer privacy at the forefront during this pivotal phase.
