German Central Bank President Dr. Joachim Nagel has indicated that the digital euro is unlikely to be launched until 2028 or 2029, as he stated during the DZ Bank Capital Markets Conference 2024.
The European Central Bank (ECB) initiated a two-year “preparation phase” for the digital euro project last year. This phase involves finalizing rules, selecting private-sector partners, and conducting testing and experimentation. The Governing Council will decide on the next steps of preparation after the European legislative process concludes.
The digital euro is designed to serve as a central bank digital currency (CBDC), providing an electronic form of cash backed by a central bank. Dr. Nagel highlighted its benefits, including security, convenience, speed, reliability, and acceptance across the eurozone.
He noted that currently, German bank cards may not be functional in other euro area nations, but the digital euro could facilitate various transactions, from online purchases to in-store transactions and payments to public authorities.
Dr. Nagel outlined that most people would use the digital euro through their existing online banking app provided by their bank or a digital euro app on their smartphone with baseline functionalities provided by the Eurosystem.
While critics have raised concerns about the digital euro, such as its potential impact on banks and privacy, the ECB argues that it would introduce competition in the payments sector dominated by American companies. To address concerns about reducing bank reserves, the ECB plans to impose limits on individual holdings, likely around 3,000 euros.
