In October 2023, the European Central Bank (ECB) officially launched the preparation phase of the digital euro project, marking a major transition from study to implementation. The move came after a two-year investigation phase, during which the ECB had explored possible design models, privacy options, and the potential impact on Europe’s financial system.
The decision to advance was approved by the ECB’s Governing Council, signaling strong institutional support for a digital version of Europe’s common currency. ECB President Christine Lagarde called the step “a key milestone in ensuring the euro remains fit for the digital age.”
The preparation phase, set to run until 2025, focuses on developing the technical infrastructure and rulebook for the digital euro. This includes selecting technology providers, refining the payment architecture, and establishing the regulatory framework in cooperation with the European Commission. The ECB emphasized that the digital euro would “work everywhere in the euro area, like cash, but in electronic form.”
One of the main goals of this phase is to ensure the digital euro can function both online and offline. The ECB confirmed that offline payments — enabling users to transfer funds between devices without internet access — would remain a priority, addressing privacy concerns raised during earlier consultations.
The central bank also began working with national central banks and the private sector to design a prototype system. European commercial banks, fintechs, and payment providers were invited to test technical solutions for integrating the digital euro into existing financial infrastructures.
However, challenges remained. The banking sector continued to warn that the introduction of a central bank digital currency could divert deposits from commercial institutions. To mitigate risks, the ECB reaffirmed that holding limits and tiered remuneration mechanisms were under consideration.
At the same time, the European Commission advanced its legislative proposal for the digital euro, which would provide the legal foundation for issuance. The draft law aimed to guarantee access, privacy, and interoperability with existing payment methods.
By the end of 2023, the digital euro had moved closer to reality. For the first time since its introduction two decades earlier, the euro was being reimagined for a new era — one defined by digital payments, financial innovation, and the need for monetary sovereignty in an increasingly globalized financial system.
The ECB said the decision to issue the digital euro would only come after the preparation phase concludes, likely around 2026. Until then, the focus remains on building — and testing — the future of European money.