European Central Bank President Christine Lagarde said on October 17, 2026 that a digital euro would complement rather than replace cash, as the Eurosystem continues preparations for a currency that could enter circulation by 2029.
Lagarde made the remarks at the International Monetary and Financial Committee meeting, held during the IMF Annual Meetings. Her comments come as the ECB pushes for the European Union to finalise legislation governing the digital euro before the end of 2026, a timeline the central bank views as necessary to keep the project on track.
If the legislative and technical conditions are met, the ECB Governing Council would retain final authority over whether and when to issue the digital euro, with first issuance possible in 2029. Before any public rollout, the Eurosystem plans a 12-month internal pilot in the second half of 2027, involving 36 payment service providers.
A liability of the ECB, not a bank deposit
The digital euro is designed as a central bank digital currency, meaning it would be a direct liability of the ECB rather than of commercial banks, and would be distinct from both bank deposits and private stablecoins. Banks and payment service providers would handle its distribution to the public.
To limit disruption to the banking system, the digital euro would not pay interest, and individual holding limits would apply to reduce the risk of large-scale transfers out of bank accounts.
Privacy modelled on cash
The Eurosystem has structured the privacy framework around the behaviour of physical cash. For offline payments, the aim is to ensure that only the payer and the receiver know the details of a transaction, mirroring the anonymity of a cash exchange. For online payments, the Eurosystem itself should not be able to identify users, although financial intermediaries would retain their existing obligations to verify identity and comply with anti-money laundering rules.
Reducing reliance on foreign card networks
Part of the rationale behind the project is strategic. The ECB estimates that international payment networks such as Visa and Mastercard process more than 60% of card payments in the euro area. The digital euro is intended, in part, to reduce European dependence on this foreign-controlled infrastructure, giving the bloc a publicly backed alternative for everyday payments.
With legislation still pending and the pilot phase more than a year away, the project's timeline remains contingent on political agreement among EU lawmakers, who must sign off on the legal framework before the Eurosystem can move toward implementation.
