European Union Central Bank (ECB) governor Christine Lagarde recently announced that a decision to introduce a central bank digital currency (CBDC) would be taken by October. She also said that a widespread introduction of the digital euro is not expected any time soon.
A "pilot phase of testing and fine-tuning" will begin after the CBDC Governing Council meeting. If it proves successful, mass implementation could take place by 2027.
Maintaining the value of fiat currency relative to CBDC is a priority.
Alongside Christine Lagarde, Bank of England Governor Andrew Bailey commented on the technology, suggesting it could lead to a revolution in infrastructure, financial markets and trade finance.
The central bank has been researching the digital euro since 2021. The project appeared in November 2019 and a report from the ECB followed in October 2020. Lagarde predicted that the CBDC would be in place within four years.
ECB Governing Council member Fabio Panetta said it would take three to four years to establish the legal framework needed to issue a digital currency.
In June 2023, the European Commission proposed a bill that would supplement cash with digital euros. CBDC would be available as an electronic wallet and could also be used for offline transactions.
The Bank of Switzerland also plans to introduce a national digital currency on the SDX exchange through a pilot programme with rapid implementation.
