ECB Sets 2029 Goal for Digital Euro as Preparation Phase Begins

The European Central Bank has officially closed the preparation phase of its digital euro project, marking the transition into a new stage focused on building and testing the technology needed for a potential launch. This update, announced on October 30, 2025, represents one of the most important milestones since work began in 2020. The ECB plans to make the digital euro technically ready by 2029, provided new legislation is approved and development continues as expected.

This next phase carries major implications for everyday users, businesses, banks, and even the wider crypto industry. It sets the foundation for a system that aims to combine the stability of the euro with the speed and efficiency offered by modern digital networks. Europe is preparing for a world where digital transactions are instant, low-cost, and supported by strong privacy protections. The shift also matters for crypto users, because CBDCs like the digital euro could influence how stablecoins operate and how digital assets move across borders.

Work on the digital euro began during the early months of the pandemic, when Europe saw a surge in online transactions and needed more resilient payment systems. From 2020 to 2023, the ECB studied how a digital version of its currency might work, looking closely at user needs, technical standards, privacy requirements, and potential risks.

In 2023, the project moved into a structured preparation phase. During this period, the ECB created a detailed rulebook for how the system should operate and selected technology partners to begin shaping the underlying tools. Tests were also run with payment providers and market participants to understand how the digital euro might function in shops, online platforms, and peer-to-peer transfers.

By October 2025, the preparation work was complete, allowing the ECB to shift toward building real systems, testing them in controlled environments, and preparing for pilot transactions. This change signals that the project is no longer theoretical. It is now entering the stage where prototypes become working versions.

Digital Euro Path Toward 2029: Timelines and Future Tests

The next major milestone depends on European lawmakers. If legislation supporting the digital euro is passed in 2026, the ECB expects to begin pilot testing in 2027. These pilots would include trial transactions, merchant testing, and stress simulations. They will help confirm whether the digital euro can support the large number of payment operations carried out daily across the eurozone. If everything progresses smoothly, the digital euro could be technically ready for a possible first issuance in 2029. However, the ECB has repeatedly stated that launching the currency will only happen if policymakers approve it. The goal is not to replace cash but to offer an additional, secure digital option.

Privacy has been one of the most debated topics in the digital euro discussion. Many Europeans want digital payments that feel as private as cash. The ECB has acknowledged these concerns and plans to design the digital euro with strict privacy safeguards, especially for everyday low-value transactions.

The project also includes plans for offline payments. This means users may be able to pay with the digital euro even without an internet connection through hardware devices such as cards or small handheld tools. These features aim to support people in rural areas, reduce reliance on phones, and ensure the currency remains widely accessible. Holding limits are also expected to be part of the design. These limits, likely a few thousand euros per user, help protect financial stability by preventing large movements of funds out of banks and into the digital euro all at once.

The ECB estimates the digital euro project will require around €1.3 billion in development through 2029. This includes money spent on external technology providers, testing environments, and internal teams. After 2029, the digital euro is expected to cost about €320 million per year to operate. The budget highlights Europe’s long-term commitment to modernizing its payment systems. It also reflects the responsibility of maintaining a secure public currency that millions may eventually use each day.

A simplified overview of the project timeline and estimated cost is shown here:

 

Phase	Start	Focus	Estimated Cost
Investigation	2020	Early research	~€50M
Preparation	2023	Rulebook and technical planning	~€400M
Readiness	2025–2029	Building, testing, piloting	~€850M
Operations	Post-2029	Running the system	~€320M annually

A Global Race Toward Central Bank Digital Currencies

More than 130 countries are exploring central bank digital currencies, but Europe’s project stands out because of its emphasis on strong privacy protections and consumer choice. The digital euro is being designed to work alongside private payment systems rather than replace them. It may also influence how stablecoins operate in the EU under the region’s MiCA framework. Many governments are moving quickly, but Europe’s pace reflects caution. The ECB wants a system that is safe, reliable, and trusted by the public. The shift to the readiness phase signals growing confidence that the digital euro could play a major role in the future payment landscape.

The ECB’s decision to move the digital euro into its next phase marks a turning point in Europe’s journey toward modernizing its currency. With privacy protections, offline capabilities, and strong technical standards, the digital euro aims to offer the convenience of digital payments while keeping the security and trust associated with the euro itself.

As Europe moves toward a more digital future, the digital euro could influence everything from online shopping to cross-border payments and even interactions with crypto platforms. The coming years will shape how millions of Europeans pay, save, and transact in a world where digital money becomes as familiar as cash.