The digital euro is expected to debut as early as 2029. Can it compete with the US dollar stablecoin?

The European Central Bank (ECB) Executive Board member Piero Cipollone recently revealed that the digital euro could be launched as early as 2029. He pointed out that Eurozone finance ministers have reached a framework agreement on customer holding limits, marking a "significant breakthrough." This move injects new momentum into the digital euro project, aimed at ensuring Europe's sovereignty in the digital payment space and countering the rising influence of dollar-dominated stablecoins. Although the project still faces legislative and technical challenges, the progress in political negotiations indicates that it is moving from concept to reality.

###Promote the Digital Euro: Defend Payment Sovereignty

The European Central Bank has been working for years to promote the digital euro project, primarily aimed at reducing dependence on private payment giants like Visa and PayPal, and preventing dollar-backed stablecoins from becoming the mainstream of daily digital payments in Europe. According to Cipollone, the biggest obstacle to the project—the legislative process—is making progress. The European Parliament must approve the legal basis for the project. Cipollone stated that after the progress report on October 24, lawmakers will have six weeks to propose amendments, followed by five months of negotiations. This timeline means that the European Parliament could form its position as early as early May next year, and member states hope to reach a "comprehensive agreement" by the end of this year.

###Technical and Design Choices: Privacy, Banking, and Blockchain

The digital euro still has open options at the technical level. According to reports, officials are weighing whether to build the digital euro on public blockchains like Ethereum or Solana, which is different from the earlier inclination towards a private ledger operated by the European Central Bank. Supporters believe that building on an open network can expand the reach of the digital euro; critics warn that this may expose transaction details and complicate privacy protection.

In addition, while supporters emphasize that the digital euro can reduce costs, increase transparency, and enhance payment speed, skeptics have raised questions about how its design will protect user privacy, how it will coexist with traditional banks, and how it will compete with existing stablecoins without distorting the market. These technical and design choices will be key to determining the success or failure of the digital euro.

###Conclusion

As you know, the European Central Bank is advancing the digital euro project at a steady pace. (4) Although the launch timeline of 2029 seems far off, it reflects the complexity of the project requiring political consensus, technological readiness, and sound safeguards. The successful launch of the digital euro is not only a technological innovation but also a strategic move for Europe to maintain its monetary sovereignty and financial stability in the digital age.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions cautiously.