In its next phase, which will ensure the technical readiness for its first edition, the project of the “digital euro” passes after a relevant decision of the Board of Directors of the European Central Bank (ECB).

The final decision of the Governing Council of the ECB on the issuance of the digital euro and the date of issuance will be taken only after the adoption of the legislation, therefore – as the ECB estimates – in the event that the relevant legislation is enacted within the next year, the pilot program of the issuance of the digital euro could start in 2027, while the Eurosystem could be ready for a possible first issuance of the digital euro within 2029.

The digital euro will preserve Europeans’ freedom of choice and privacy and protect Europe’s monetary sovereignty and financial security. It will drive innovation in payments and help make European payments competitive, resilient and inclusive. The Eurosystem will carry out its preparatory work flexibly, in line with the calls of euro area leaders to be ready for the possible issuance of a digital euro as soon as possible, while recognizing that the legislative process is not yet complete.

As the head of the ECB, Christine Lagarde, said, “the euro, our common currency, is a reliable symbol of European unity.” “We are working to make its most tangible form – euro banknotes and coins – fit for the future, to redesign and modernize our banknotes and to prepare for digital cash,” Ms Lagarde added.

The digital euro will complement cash and transfer its benefits – simplicity, privacy, reliability, availability throughout the euro area – to digital payments. Alongside the regulation on the establishment of the digital euro, the ECB also supports the European Commission’s proposal to strengthen the right to pay in cash.

The final cost of the digital euro – both to develop and operate it – will depend on its final design, including the components and associated services that need to be developed.

As a result of the work carried out during the preparatory phase, the total development cost, which includes both externally and internally developed components, is estimated to be around €1.3 billion until the first release, which is currently expected within 2029. Thereafter, annual operating costs are projected to be around €320 million per year from 2029 onwards.

The Eurosystem will bear these costs, as it does for the production and issuance of euro banknotes, which, like the digital euro, are a public good. As in the case of banknotes, this cost is expected to be offset by the monetary income generated, even if holdings of digital euro would be small compared to banknotes in circulation.