The ECB will launch the first pilot program of the Digital Euro in 2027 and is considering the first issuance for 2029

He Digital Eurothe project of European Central Bank (ECB) for the implementation of a digital currency in the Eurosystem, the first phase that began in 2023 has satisfactorily concluded and is already facing the second with the objective of launch a pilot program starting in 2027.

This was reported this Monday Carlos Conesadeputy general director of operations, markets and payment systems of the Bank of Spain, at an Open Day held at the banking regulator’s facilities to report on the progress of the Digital Euro project.

Conesa has explained that if the corresponding European regulations are approved in 2026, a pilot program will be launched from 2027, the first step to carry out a possible first issuance of the Digital Euro in 2029. “In 2027, for the first time, the Digital Euro will be able to be used and small technical problems that may arise can be detected and resolved before definitive implementation,” he assured.

The senior official of the Bank of Spain has also highlighted that the pilot test will serve to “make the path easier” and has ruled out that the virtual currency is going to have negative effects or compromise the viability of European economic policy.

Conesa has also remembered the banks and their concern regarding the economic cost that the project will entail for them and has stated that The adaptation costs for financial institutions will be similar to those of other similar initiatives.

Public means of payment as a complement to cash

This European project seeks to offer a public digital means of payment, which complements cash and ensure simplicity, privacy and reliability throughout the euro zone. The EU and the ECB see in the Digital Euro a way of cut dependence on US companies for digital payments, prevent citizens from opting for less safe alternatives such as stablecoins and reinforce the international weight of the euro.

Unlike cryptocurrencies, The digital euro is backed by the ECB, the entity that will decide the issuance of digital money. On the other hand, the stability of cryptocurrencies depends on the reliability and credibility of the entity that issues them, they are created by users and their value varies depending on supply and demand.

Cryptocurrencies such as Bitcoin or Ethereum are decentralized digital assets, without state support and without being subject to any regulation. Instead, the digital euro would be subject to banking regulations.