European Central Bank: To officially issue the "digital euro"

The European Central Bank recently announced that the “Digital Euro” project has entered the next phase: if the relevant regulations are passed in 2026, a pilot is expected to launch in 2027, with formal issuance in 2029.

For digital currencies, stablecoins, and crypto projects in the payment chain, this is undoubtedly a bombshell - it not only signifies the substantial emergence of the Central Bank Digital Currency (CBDC) era but also means that the traditional stablecoin ecosystem, on-chain payment services, and blockchain financial infrastructure may be reshuffled.

This article will delve into its development path, key impacts, and investment opportunities based on the latest statement.

01 “Digital Euro” Timeline

According to the official announcement from the European Central Bank on October 30:

The investigation phase (2021-2023) has been completed.

The current “preparation phase” (starting in November 2023) focuses on: technical preparation, interaction with market participants (payment service providers, merchants, users), and regulatory support.

The future timetable is as follows:

2026: The passing of EU legislation as a prerequisite.

Mid-2027: Pilot trading and preliminary user testing may be launched.

2029: If everything goes smoothly, the digital euro may be issued for the first time and enter public payment scenarios.

The official emphasized: the digital euro is not a replacement for cash, but a digital form that “supplements cash,” aimed at enhancing Europe's position in digital payments, monetary sovereignty, and financial competition.

02 Why promote it now, and what is its significance?

Changes in Payment Patterns: With the rise of online transactions, mobile payments, and cross-border digital payments, the use of cash continues to decline.

The European Central Bank believes that if a central bank digital currency is not launched, the status of public money may be marginalized by private stablecoins or overseas payment systems.

Sovereign finance + payment autonomy: The Eurozone currently relies heavily on the US-led systems (Visa, Mastercard) and dollar-denominated stablecoins in the payment chain.

The digital euro is seen as a tool to strengthen Europe's “monetary sovereignty.”

Financial Infrastructure Innovation Platform: The Digital Euro Project emphasizes “open standards,” “public-private cooperation,” and “innovation platforms,” creating new opportunities for payment service providers, merchants, and FinTech.

03 Which cryptocurrencies/projects will be profoundly affected?

The following lists several types of projects that may be passively or actively affected for your attention.

Stablecoin ecosystem

If the digital euro gains widespread adoption, the use of dollar-pegged or other crypto stablecoins within the Eurozone may be suppressed.

Projects like Tether (USDT) and USDC may face regulatory or competitive pressures in European operations.

It may also give rise to “European stablecoins” such as compliant stablecoins in the eurozone or digital tokens issued by banks.

On-chain payment infrastructure / wallet / fintech

Payment Service Providers (PSP), wallet applications, and merchant integration tools will find new “sink points” in the digital euro ecosystem.

Cryptowallets and blockchain payment platforms like Solana and Avalanche may participate in “technical bridges,” but they also face competition led by the Central Bank.

If the project can collaborate with the Central Bank digital currency/payment infrastructure in advance, it will have a first-mover advantage.

Blockchain Financial Infrastructure / Tokenization Platform

The digital euro, as a “public version of digital cash,” entering the blockchain may promote the tokenization of assets (for example, compliant on-chain stocks in Europe overnight, on-chain stocks became popular!) further development.

Projects corresponding to this, such as those focusing on asset on-chain and compliant tokenization infrastructure platforms, will benefit.

At the same time, the compliant financial chain (such as banks + blockchain + regulation) will accelerate maturity and put regulatory adaptation pressure on purely decentralized projects.

On-chain asset compliance is a major trend.

If cryptocurrency exchanges, cross-border payment platforms, stablecoin issuers, etc. do not adapt to the trend of Central Bank digital currencies, they may become candidates for “replacement.”

On the contrary, projects that can integrate into the Central Bank digital currency ecosystem, provide compliant products, or become infrastructure providers may see breakthroughs.

04 Potential “Ripple Effect” on the Chinese/Global Crypto Market

Global Perspective: As the second largest currency area in the world, the successful implementation of a digital euro in the Eurozone will provide a “model” for other Central Banks (such as those in Asia and Latin America), further accelerating the trend of CBDCs.

For the Chinese market: China has already piloted the digital renminbi (e-CNY), leading the global Central Bank competition. The advancement of the digital euro may accelerate the unification of global regulation and the implementation of Central Bank digital currency standards.

The issuance model of the future China-Europe CBDC will surely clash with the highly market-oriented stablecoin model of the United States.

Very curious, who will laugh last~