European Central Bank President Christine Lagarde has said the ECB is looking to issue a digital euro by October 2025, once legislation comes into effect – if the central bank has its way. However, lawmakers recently raised doubts on whether a digital euro can take flight, according to a Reuters report on Monday.
Lawmakers are hesitant to trust the ECB with the running of a digital euro following an outage that occurred with the Target 2 (T2) payment system last month where it could not settle transactions for a day. T2 handles big transactions.
Though an ECB official said that the digital euro would be similar to its instant payments system TIPS which is 24/7 and handles smaller transactions, the report added. CoinDesk reached out to the ECB for a comment.
The ECB is keen to ensure the digital euro goes live.
“Fabio Panetta on the Board and then Piero Cipollone, who has replaced Fabio, have taken the lead together with a very good team, which is focused on accelerating the pace and hopefully campaigning enough with all the stakeholders – meaning the European Parliament, European Council, European Commission – so that we can eventually, not put to bed, but put to reality this digital euro,” Lagarde said at a press conference on Friday.
A decision by the EU’s Governing Council on whether or not to issue a digital euro is expected to occur after legislation takes effect. The Governing Council includes Lagarde, Panetta alongside other members of the ECB board plus the governors of national central banks.
The digital euro – which would be the EU’s central bank digital currency (CBDC) – a digital token that a central bank issues – has been met with different viewpoints throughout the years.
Some countries like Spain in the past have not seen a digital euro as something that their nation needs. Lagarde emphasised that the need is pressing.
“I think it is critically important, and for the agnostics or the sceptics, it now seems more relevant and more imperative than ever before, both on the wholesale and on the retail level,” Lagarde said.
Should the EU decide to issue a digital euro it will be following in the steps of countries like the Bahamas, Jamaica and Nigeria who have launched their CBDC’s and veering away from the U.S.’s stance to not produce one.