ECB to Launch Digital Euro CBDC by October 2025

The European Central Bank (ECB) is seeking to wrap up its preparation phase for a digital euro by October 2025. However, questions remain about whether the project will succeed.

Some lawmakers have expressed concerns about letting the ECB manage the digital euro. These concerns grew after the recent outage in the ECB’s Target 2 (T2) payment system. Critics worry that this could be a potential setback for the digital euro. However, ECB officials argue that the digital euro will be built differently. Unlike T2, it will function like TIPS, the ECB’s instant payment system.

ECB Assures Digital Euro’s Reliability Amid Technical Glitches

The TIPS runs 24/7 and processes smaller transactions. Furthermore, an ECB spokesperson reassured the public that the digital euro’s design will ensure smooth payments, even during technical glitches.

“The recent outage doesn’t undermine the robustness of the digital euro infrastructure, which is being designed to guarantee that payments continue to function smoothly for users, even when technical difficulties arise, the spokesperson said.

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Interestingly, ECB President Christine Lagarde expressed confidence in the project. Lagarde noted that the ECB is collaborating with major stakeholders like the European Parliament, European Council, and European Commission to advance the project.

The ECB first announced plans for a digital euro in 2023. Since then, there have been different testing phases, including gathering feedback and working on guidelines for the currency.

Is a Digital Euro Needed?

The idea of a digital euro has been divisive within Europe. Some countries have expressed support for the project, while others have questioned its relevance. However, the ECB is adamant that a digital euro will serve both retail and wholesale purposes.

She said, “I think it is critically important, and for the agnostics or the skeptics, it now seems more relevant and more imperative than ever before, both on the wholesale and on the retail level.”

The US notably opted against launching a digital dollar. Regardless, several countries are currently exploring the possibility of launching a digital currency.

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