European Central Bank President: Digital Euro will take at least two more years

According to a report by CoinDesk, European Central Bank President Christine Lagarde told lawmakers on Monday that the digital euro is at least two years away as she seeks to address privacy concerns raised by central bank digital currencies (CBDCs).

The Role and Progress of the Digital Euro

The European Central Bank (ECB) released a report earlier this year on the Digital Euro, stating that its role as a currency anchor will protect the public's access to central bank money in the digital world through widespread use by potential users. The broad use within the Eurozone, which views Europe as a single nation-state, is a fundamental principle. The ECB aims to strengthen the strategic autonomy of the Eurozone by enhancing its independence from non-European payment solutions and improving economic efficiency by curbing market abuse.

The report outlined that mechanisms for online/offline payments, settlement modes, privacy, and fund transfers will be completed by 2022. Use cases will include e-commerce, government payments, peer-to-peer transactions, and physical store usage. In the first quarter of 2023, trials for additional services/features will be conducted, focusing on market research, studies of specific demographics, and prototyping the Digital Euro, which will be completed and reviewed in the second quarter of 2023.

Striking a Balance Between Privacy and Traceability for the Digital Euro

Christine Lagarde, President of the European Central Bank, told members of the European Parliament's Committee on Economic and Monetary Affairs on Monday:

The ECB's Governing Council will only decide in October whether we can proceed with more experiments on the project. And it may take another two years of experimentation before a final decision is made.

As some European Parliament members seem to have reservations about signing on to these plans, the ECB had previously pledged not to make any decisions until there is agreement among legislators and EU member state governments on legislation for CBDC privacy measures. Lagarde also stated that the Digital Euro must provide privacy in a not entirely anonymous setting, and must be user-friendly, free, and universally accessible.