The official launch of a digital EUR may not happen until 2025 – HSBC

The European Central Bank will decide on whether to progress to launching a formal investigation of a digital EUR around mid-2021. The central bank has pledged not to use the digital EUR to enforce deeply negative interest rates. Assuming the go-ahead transpires, its rollout would take time, but this may still put the ECB ahead of many of its G10 peers, economists at HSBC inform.

ECB has yet to decide on whether it plans to even go forward with this project

“The ECB will decide on whether to progress to launching a formal investigation of the digital EUR around the middle of 2021.”

“Many have raised concerns that a digital EUR could be used to enforce deeply negative interest rates. However, the ECB has pledged this will not be the case, and in other trials around the world central bank digital currencies (CBDCs) have not been interest bearing. If the same framework was adopted, the digital EUR would most likely act in a similar way to physical cash.” 

“Should the digital EUR project be given the green light, then a two-year investigative phase will begin, which would aim to come up with at least one design that meets the requirements of the public. Thereafter, assuming the project was given the go-ahead, it would likely take another two to three years to develop, test, and eventually roll out the digital EUR.” 

“We are unlikely to see a digital EUR until 2025, but this may still put the ECB significantly ahead of many of its G10 peers.”