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The digital euro project represents one of the most significant and ambitious monetary innovation initiatives undertaken by the European Union in recent years. The idea of introducing an electronic version of the single currency originated within the European Central Bank, which in 2021 officially launched a comprehensive study and design program aimed at evaluating the feasibility of a digital currency issued directly by the central bank. This initiative is part of a global context characterized by increasing digitalization of payment systems and a gradual reduction in the use of cash in everyday transactions. The primary objective is to create a digital equivalent of physical currency that can complement traditional forms of payment, while ensuring stability, security, and accessibility within the European financial ecosystem. In this sense, the digital euro is conceived as a tool capable of adapting the Union’s monetary infrastructure to the technological and financial transformations that are redefining the functioning of contemporary markets and economies. From the early stages of the project, European institutions viewed the digital euro not only as a technical innovation, but also as a potential strategic tool for strengthening the autonomy and resilience of the European financial system. The design process therefore involved numerous institutional stakeholders, including national central banks, regulatory authorities, and EU bodies, with the aim of defining an operating model capable of ensuring both transaction efficiency and user protection. Over the years following the launch of preliminary work, the program has gradually clarified and structured its fundamental characteristics, outlining the digital currency’s issuance procedures, the role of financial intermediaries, and potential applications in the payment system. The digital euro project has currently reached a relatively advanced stage of conceptual and technical definition. The main operational characteristics have been identified and discussed within the European institutions, while several political and regulatory decisions necessary for its effective implementation remain to be finalized. Specifically, the overall design of the system is now outlined in its essential aspects, but its introduction depends on the approval of the European Union’s legislative institutions, which are responsible for establishing the regulatory framework for the new form of currency. The decision-making process for the digital euro unfolds across multiple institutional levels and requires coordination between European bodies and national authorities. Before the new digital currency can be effectively introduced, the entire legislative process must be completed, including the discussion and approval of regulatory proposals by the relevant institutions. Only once this procedure is completed and final political authorization is obtained will it be possible to begin the operational phases leading to the actual issuance of the digital euro and its integration into the European payment system.
CHARACTERISTICS AND OPERATION OF THE SYSTEM
The operating model of the digital euro envisages that any individual can open a dedicated account with a bank or other authorized payment services intermediary. These accounts would be denominated in digital euros and would constitute a form of money issued directly by the central bank. In other words, the deposited funds would represent a direct credit to the European Central Bank and not to a commercial bank, establishing a financial relationship different from traditional bank deposits. This institutional setup distinguishes the digital euro from many of the cryptocurrencies currently traded in financial markets. Unlike digital assets like Bitcoin, whose value can fluctuate significantly, the new digital currency would maintain the stability typical of legal tender. From a technological and infrastructural standpoint, the system would be designed to ensure faster and more secure transactions than some of the mechanisms currently used for electronic payments. The expected benefits include reduced user fees, a higher level of operational security, and greater strategic autonomy from private international payment networks.
FINANCIAL AUTONOMY AND REDUCED EXTERNAL DEPENDENCE
One of the central elements of the digital euro debate concerns Europe’s growing dependence on non-EU payment infrastructures. Currently, a significant portion of digital transactions conducted on the continent pass through circuits operated by US companies. According to various institutional analyses, approximately six out of ten European transactions pass through these platforms: this situation is considered problematic, especially in an international context characterized by growing trade tensions, increasingly frequent sanctions regimes, and progressive geopolitical fragmentation. In this scenario, the creation of a public digital payment system would represent a tool to strengthen the European Union’s financial sovereignty. The digital euro could therefore play a strategic as well as technological role, reducing Europe’s exposure to infrastructures controlled by external parties and contributing to the construction of a more autonomous financial ecosystem.
PLANNED PHASES FOR THE INTRODUCTION
The path to the introduction of the digital euro involves several operational and institutional stages. The European Central Bank has indicated a preliminary timetable that includes the selection of payment service providers starting in early 2026. These providers will be responsible for providing the technical infrastructure and services necessary to manage digital transactions. A subsequent experimental phase is expected to begin around the end of 2027: during this period, a pilot project lasting approximately twelve months will be launched, in which real transactions will be conducted using the new digital monetary system. This phase will be crucial for verifying the technical reliability and operational effectiveness of the infrastructure. If all technical and political conditions are met, the actual issuance of the digital euro could occur around 2029. This deadline, however, remains subject to the final approval of the European regulatory framework.
THE EUROPEAN LEGISLATIVE PROCESS
The legislative process represents one of the most delicate aspects of the entire project. The European Commission presented a proposal for a regulation on the digital euro in June 2023, aiming to establish the legal framework necessary for its introduction. Despite its importance, the decision-making process has encountered significant delays. Nearly three years after the proposal was presented, the European Parliament has yet to adopt a definitive negotiating position. In particular, the European Parliament’s Committee on Economic and Monetary Affairs, known as the ECON Committee, has repeatedly blocked the approval of amendments considered crucial. Among the most controversial points is the issue of the system’s full functionality in both online and offline modes, a factor deemed essential to ensuring accessibility.
POLITICAL OUTLOOK AND FUTURE SCENARIOS
Resolving the current legislative stalemate is an essential and unavoidable condition for the digital euro project to continue along its institutional path. The European decision-making process, in fact, requires a series of formal steps that must be completed before any monetary innovation can be implemented on a large scale. In this context, one of the most significant moments could occur in May 2026, when the possibility of a plenary vote in the European Parliament is being considered. A vote in this forum would have the potential to break the impasse that has persisted for several months, allowing the legislative process needed to define the regulatory framework for the digital euro to be reactivated. One of the main critical issues that emerged during the institutional debate concerns the role of the ECON Committee, which is responsible for examining in detail legislative proposals relating to economic and financial matters. Should this committee continue to experience deadlock or difficulties in reaching a compromise between the different political positions, MEPs could decide to adopt an alternative course of action. This would be a significant procedural choice, demonstrating the strategic importance attached to the digital euro project within the context of the Union’s economic policies. The stakes are particularly high, as it represents the formal step required to initiate the so-called trilogues, i.e., interinstitutional negotiations between the European Parliament, the European Commission, and the Council of the European Union. This phase constitutes a crucial stage in the European legislative process, as it allows the three main EU institutions to discuss and reach a final agreement on the legislative text to be adopted. Without the initiation of trilogues, a shared compromise could not be achieved, and consequently no final legislation concerning the introduction of the digital euro could be adopted. The absence of a clear and formally approved legal basis would also prevent the Governing Council of the European Central Bank from proceeding with the issuance of the new digital currency. The ECB, despite having already developed much of the project’s conceptual and technical architecture, cannot introduce a new monetary instrument without the explicit support of European legislation. This means that the fate of the digital euro depends largely on the ability of political institutions to reach an agreement. In this institutional landscape, the digital euro emerges as a project that is not solely about technological innovation in the field of digital payments; it also represents an element of geopolitical strategy and economic governance, as it aims to strengthen the EU’s financial sovereignty in an increasingly competitive and fragmented global environment. The future of the European digital currency will therefore depend not only on the soundness of the technical solutions developed by the Central Bank, but also on the political will of European institutions to achieve a significant transformation of the Union’s monetary architecture.