- The European Central Bank (ECB) plans to launch a digital euro, a central bank digital currency (CBDC), as soon as possible.
- The digital euro aims to coexist with physical banknotes and be used for online payments across the European Union (EU).
- The ECB will develop the technical infrastructure for the digital euro, targeting a rollout in 2029 pending legislative approval by the EU.
- The announcement has faced significant opposition from the crypto community, citing concerns over privacy and surveillance risks.
- Legislators in France and Germany have proposed banning CBDCs and instead supporting Bitcoin as a strategic asset.
The European Central Bank (ECB) announced plans to introduce a digital euro, a central bank digital currency (CBDC), aiming to launch it “as early as possible” to serve as a companion to physical banknotes in the European Union. The digital euro will be available for both cash and online payments within the EU.
The ECB’s governing council revealed on Thursday that it will start building the digital euro’s technical infrastructure. The project is set to move into a testing and deployment phase, with a possible launch in 2029 if legislation permitting the ECB to issue the CBDC is passed by EU lawmakers.
Christine Lagarde, ECB president, emphasized the unifying role of the euro, stating, “This is a big project because the euro is our currency, your currency. It brings us together. It’s a symbol of trust in our common destiny, so off we go with the digital euro in the next and final phase of preparation.” The digital euro aims to coexist with physical currency to ensure continued cash use.
The idea of CBDCs has drawn strong criticism within the cryptocurrency community. Some critics argue that CBDCs could enable intrusive real-time monitoring of payments and spending, posing threats to privacy and civil liberties. For example, David Thunder, a political writer, said, “creating a central bank digital currency erodes that trust by opening up the door to real-time monitoring of our payments and spending habits.” Meanwhile, others have dismissed CBDCs as unwelcome, as reflected in remarks like, “Begone, witch, we’re gonna use private money,” from Mert Mumtaz, CEO of a node provider.
At the same time, elected officials in Europe are proposing legal responses to this development. In France, Éric Ciotti of the Union of the Right for the Republic introduced a proposal to ban CBDCs. Likewise, the German political party Alternative for Germany has submitted a motion promoting Bitcoin as a national strategic asset rather than supporting CBDCs.
Central bank digital currencies are government-issued digital forms of money designed to be legal tender. Though they aim to provide a state-backed digital payment option, they differ fundamentally from decentralized cryptocurrencies, which operate without central authority and prioritize user privacy.
For further details, visit the ECB digital euro announcement and the ECB governing council statement.
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