(Financial Times Europe, Ignazio Angeloni, 12 May 2026)
Six years after starting work, the ECB is still in the technical preparation phase for a possible launch of the digital euro in three years. This extreme delay, compared to the speed of fintech innovation, risks making the project obsolete before it even sees circulation. Born as a response to Facebook’s Libra, the digital euro aims to allow citizens to make payments in central bank money but faces strong resistance from the private sector concerned about bank disintermediation, financial stability, and privacy.
Meanwhile, distributed ledger technologies (DLT) are opening new frontiers in wholesale, with projects like Pontes (pilot from September) and Appia, which combine the security of central bank money with the advantages of distributed ledgers. These developments are promising but entail risks for financial stability and a greater presence of the ECB as a market infrastructure provider.
The ECB is right to shift attention to wholesale, but it must decide what to do with the retail digital euro, a project that risks becoming obsolete before it is born if it does not accelerate or redefine its purpose.
Dangerous delay
“Six years after outlining the first roadmap, technical preparations are still underway for a possible launch in three years. This is geological time compared to the dizzying pace of fintech innovation. If and when a positive decision arrives, the digital euro risks being old before it is born.”
Resistance from the private sector
“From the start, the digital euro has faced resistance from the industry. It is difficult to find a convincing use case: people are comfortable with current payment systems, which are cost-efficient and secure.”
More promising wholesale projects
“Pontes will add a DLT layer to Target, the central bank counterparties’ payment infrastructure. Appia will extend a similar structure to wholesale financial exchanges. The ECB has given itself until 2028 to study the project.”
Risk of role confusion
“Giving access to all participants in wholesale financial markets to the central bank multiplies risks to financial stability during systemic stress moments. Moreover, the ECB would become a market infrastructure provider, an activity so far largely left in private hands.”
Shift in focus
“The ECB is right to shift the focus more onto wholesale markets. This leaves the question of where the digital euro will be left.”
(Excerpt from the newsletter by Giuseppe Liturri)
