The European Central Bank says Christine Lagarde’s planned departure will not derail the digital euro, as EU lawmakers enter the final stage of negotiations on the legislation governing the project.
An ECB official told the Web Summit in Lisbon that a pilot programme is scheduled to begin in the second half of 2027, while the European Parliament and EU governments are expected to conclude talks on the legal framework by the end of 2026. The ECB is targeting a possible first issuance in 2029.
Digital euro project to continue despite ECB leadership changes
Alessandro Giovannini, an adviser to the digital euro programme manager, said the project was a strategic European initiative rather than a programme dependent on one ECB president.
His comments followed confirmation that Lagarde plans to leave her post on 7 February 2027, earlier than expected. Other changes are also approaching at the ECB: Isabel Schnabel is due to leave the Executive Board in January, while Chief Economist Philip Lane’s mandate expires in May.
Despite the changes, technical preparations and legislative negotiations are continuing. Giovannini said the first pilot transactions could take place in less than a year after the pilot begins.
EU lawmakers negotiate final digital euro rules
The digital euro law is now being discussed in trilogue negotiations involving the European Commission, the European Parliament and the Council of the European Union. These talks are normally the final stage before EU legislation can be formally approved.
EU leaders called in March for negotiations to be completed by the end of 2026. Ireland is chairing discussions among member states and is reportedly aiming for a deal on 18 November, although the final outcome still depends on the negotiations.
Several issues remain unresolved, including how fees paid by merchants will be calculated. Those fees are an important part of the proposed business model for the digital euro.
Readers should note that a political agreement would not automatically mean the digital euro is immediately available. The measure would still need to complete the relevant formal legislative steps before the system could be introduced.
Key points about the project
- A 12-month pilot is planned for the second half of 2027.
- The ECB has selected 36 banks and payment companies to participate in the pilot.
- Network providers are being connected to the ECB’s technical platform.
- A possible first issuance is targeted for 2029.
- The digital euro would not pay interest, like physical cash.
What the digital euro could mean for payments
The digital euro is intended to provide a public digital payment option for people and businesses in the euro area. It could also reduce reliance on international card networks such as Visa and Mastercard.
The ECB has said the shared infrastructure would be funded by the central bank and made available to participating banks without an infrastructure charge. Development costs are estimated at about €1.3 billion before a first issuance, with annual operating costs expected to reach approximately €320 million from 2029. Eurozone national central banks would bear these costs in a similar way to the system for banknotes.
The pilot will involve major financial and technology companies, including Deutsche Bank, UniCredit and Stripe. The ECB has also selected providers such as Nexi and Telefónica to help connect participants to the platform.
However, the scale of implementation is considerable. More than 4,000 payment providers and millions of merchants may eventually need to connect to the system, which helps explain why a potential launch remains several years away.
Privacy remains central to the digital euro debate
Privacy is one of the most contested issues surrounding the digital euro. Critics have raised concerns that a central bank digital currency could allow authorities to monitor or restrict spending.
Giovannini said offline payments would be designed to resemble cash transactions. Users could transfer digital euros between compatible phones without an internet connection, with the system checking that the payment token was genuine rather than recording a conventional online payment trail.
Offline payments would nevertheless be subject to limits intended to reduce risks linked to money laundering and terrorist financing. The exact limits remain part of the negotiations between EU lawmakers.
For online payments, banks would retain information about the payer and recipient in line with existing payment systems. The ECB would receive pseudonymised data rather than directly identifying the individuals involved, according to the ECB official.
Why the digital euro matters for Europe
The digital euro is part of a wider debate about Europe’s technological and monetary sovereignty. China has been developing its digital yuan, while the United States has taken a different approach by allowing private stablecoins to play a larger role in digital payments.
The ECB’s proposal would be available in the euro area and would complement, rather than replace, cash. It would not earn interest, and users would not receive a return simply for holding digital euros. Banks and fintech companies could potentially offer separate rewards or services.
For Ireland, the project is particularly relevant because the country is chairing negotiations among EU governments. Any final regulation would also shape how Irish banks, payment providers, retailers and consumers participate in the future euro-area payment system.
What happens next?
The immediate priority is for the European Parliament and the Council of the European Union to resolve outstanding issues, including merchant fees, privacy safeguards and transaction limits. A political agreement would then need to move through formal adoption procedures.
In parallel, the ECB is continuing technical work with selected banks, payment firms and network providers. The pilot planned for 2027 will provide an opportunity to test the system before any decision on a broader launch.
The ECB’s message is clear: leadership changes are not expected to delay the digital euro. The decisive milestones are now the conclusion of the legislation, the 2027 pilot and the technical readiness required for a possible 2029 issuance.
Bottom line: The digital euro remains an active ECB and EU project, but it is not yet a live currency or a finalised law. Its future timetable depends on the outcome of negotiations in Brussels and the results of the planned pilot.