The European Central Bank (ECB) has given its greenlight to the digital euro project, but when can we expect the coin to release?
The ECB is not alone in its shift into digital currencies. 81 countries are now investigating establishing CBDCs, or Central Bank Digital Currencies, as new cryptocurrencies continue to release every day.
Here's a look at what you need to know about the digital euro, or the 'e-euro'.
Digital Euro Release Date
The digital euro project officially launched in July 2021, but this does not mean the ECB is ready to mint its virtual currency ready for distribution.
Instead, the governing body has stated it will begin an investigation phase in October 2021. Here, it will assess the design, economic impact, legislative changes, and distribution issues. This will continue for two years, when the ECB will decide whether to greenlight the project, or scrap it.
From this, we could expect an early test version of the digital euro to be available sometime around 2024/25 - similar to the current digital Yuan tests - before a wider rollout.
Of course, this roadmap won't be set in stone. Delays or other issues could delay the report's findings, for example.
Alternatively, if CBCDs or private digital currencies such as Facebook's Diem Coin or Amazon's Digital Currency proliferate in the next few years, the ECB could decide to fast-track its digital euro project.
Digital Euro Price
As the digital euro will be tied to the physical fiat euro currency, its price will also be the same as one euro - which is currently worth $1.19.
The ECB hopes this will ensure the digital euro's value remains relatively stable compared to other more volatile digital currencies.
In the digital euro system, the physical euro will still exist, and likely remain the dominant form of currency. This is because the ECB has suggested implementing caps on the total individual holdings of the digital euro to prevent a large shift away from bank deposits.
Digital Euro vs Bitcoin and Cryptocurrency
The digital euro is decidedly different to bitcoin and cryptocurrency, as it is not a cryptocurrency.
While the rise of CBDCs is related to cryptocurrency - in that it is partially to prevent private, decentralised currencies from becoming dominant at the expense of state-backed banks - these digital currencies have some key differences.
First, the digital euro will not run on a decentralised blockchain, but will be controlled by a central bank - the ECB. This means the ECB will hold decision-making power over the currency.
Bitcoin, in contrast, requires a large consensus of miners for any changes. The upcoming bitcoin Taproot upgrade only passed after reaching a 90% consensus, for example.