ECB unveils digital euro strategy to modernize central bank money

The European Central Bank and the Eurosystem released a comprehensive payments strategy that places the digital euro at the core of a plan to bring central‑bank money into the digital age. The strategy addresses retail payments, wholesale tokenised settlement and cross‑border interoperability, aiming to counter the growing use of dollar‑pegged stablecoins.

Two infrastructure projects were announced: Pontes, a distributed‑ledger‑technology wholesale settlement solution intended to link tokenised assets to the ECB’s TARGET Services by the end of Q3 2026, and Appia, a longer‑term exploration of a shared European ledger for financial transactions. The ECB expects a pilot phase for the digital euro to start in mid‑2027, with a possible issuance in 2029, provided EU legislation is in place by 2026. President Christine Lagarde warned against a “digital dollarisation” of Europe and framed the digital euro as a risk‑free anchor for tokenised assets.