The European Central Bank plans to allow blockchain-based settlement of transactions in central bank money next year, as it prepares the infrastructure for a future digital euro. ECB executive board member Piero Cipollone said the initiative will enable distributed ledger technology-based transactions and support cross-border settlement with other central bank digital currencies.
Cipollone said the digital euro would include holding limits and offer no interest, measures intended to preserve banks’ role in credit intermediation and monetary transmission. While the ECB has completed its technical design, key decisions on privacy and data protection remain with EU lawmakers. ECB President Christine Lagarde has said the institution’s role is finished pending legislative approval.
The ECB argues a digital euro is needed to address fragmented retail payments and slow cross-border transfers while limiting risks from stablecoins, particularly dollar-denominated ones. Initial digital euro transactions could begin after legislative approval in 2026, with broader readiness later in the decade, depending on political consensus.
