The digital euro project has reached technical completion, but political disagreements across Europe continue to delay its official launch.
The European Central Bank has confirmed that the underlying infrastructure required to support a digital euro is operational and prepared for deployment.
According to the ECB, settlements using distributed ledger technology could begin as early as 2026 if lawmakers approve the final framework.
The system is designed to enable faster, cheaper, and more efficient payments across the eurozone while integrating with existing financial institutions.
An offline version of the digital euro is also under development, allowing users to make payments without an internet connection.
This offline functionality is intended to offer privacy protections close to those of physical cash through secure hardware embedded in smartphones and smart cards.
ECB President Christine Lagarde made clear that technical preparations are complete and responsibility has shifted to political decision-makers.
The technical work is finished, but the final decision belongs to legislators, Christine Lagarde said.
The main political hurdle facing the digital euro centres on how much privacy users should be guaranteed under European law.
Privacy advocates and civil society groups are pushing for safeguards that prevent transaction-level surveillance by authorities.
European policymakers, however, face pressure to ensure the digital euro complies with anti-money laundering and counter-terrorism financing rules.
This clash between financial oversight and personal privacy has slowed legislative progress significantly.
The prolonged debate risks pushing Europe behind other regions that are moving faster on central bank digital currencies.
Analysts warn that delays could weaken Europe’s influence over global digital payment standards.
The eventual launch of a digital euro could reshape the European cryptocurrency landscape.
Euro-pegged stablecoins such as EURT and STASIS EURO may lose relevance if an official digital alternative becomes widely available.
These stablecoins were created to provide euro exposure on-chain, a role the digital euro would fulfil more securely.
Payment-focused cryptocurrencies operating in Europe could also face declining adoption.
Networks built around fast and low-cost transfers may struggle to compete with a state-backed digital currency.
Private digital currency initiatives in Europe would likely be marginalised by an official solution integrated into the banking system.
Only crypto projects offering clear differentiation, such as advanced privacy tools or decentralised finance features, may remain competitive.
The ECB believes the digital euro could modernise payments and strengthen the European economy if political consensus is reached.
Without agreement, the project risks stagnation, leaving private actors to shape Europe’s digital payments future.