The European Central Bank (ECB) could commit to issuing a digital euro in 2027, with its introduction expected to follow in 2028, according to Stéphane Latouche, chief representative for Asia-Pacific at Banque de France.
The move comes as European authorities seek to maintain control over payments and financial infrastructure amid the shift towards digital money.
Latouche said the legislative process for the digital euro regulation was progressing, paving the way for the ECB to make a formal commitment next year.
Speaking at Hong Kong FinTech Week x StartmeupHK, Latouche said the digital euro would give consumers access to central bank money in digital form, much like banknotes do for cash transactions.
The project comes as cash use gradually declines across the euro area and contactless and mobile payments become more common.
European domestic payment schemes are also losing ground to non-European providers, which have taken a leading position in the region’s card payments market.
The growing use of US dollar-denominated stablecoins as settlement instruments has added to concerns about Europe’s reliance on payment systems and currencies outside its control.
“This raises important issues for the efficiency, the safety, and the strategic autonomy of payment services in the euro area,” Latouche said.
The digital euro is designed to provide a public payment option across the region, using infrastructure developed by European public and private sector providers.
It would operate alongside commercial bank money rather than replace existing bank deposits and payment services.
European central banks are also working on ways to bring central bank money into wholesale financial markets, where tokenisation is changing how assets are issued, traded and settled.
Latouche said the Eurosystem launched its Pontes service in September 2026, making wholesale central bank digital currency available for payments involving tokenised assets.
The service will be expanded in 2027, with its development expected to be completed by the end of 2028.
Banque de France is also working with Euroclear on Project Pythagore, which aims to modernise and tokenise Europe’s commercial paper market.
The initiative will use wholesale central bank digital currency through Pontes to settle the cash leg of transactions.
The Eurosystem is separately developing the APIA project to prepare European financial markets for wider adoption of distributed ledger technology and tokenised assets.
The central bank is discussing possible infrastructure arrangements with market participants, including how different platforms could work together and how liquidity could be managed.
The work is expected to produce an API blueprint in 2028.
Latouche said these initiatives were intended to extend Europe’s existing two-tier monetary system into digital payments and tokenised financial markets, preserving the respective roles of central bank and commercial bank money.
He also cited the development of private payment services such as Wero, a European payment initiative, as part of efforts to expand digital payment options and complement the proposed digital euro.
In wholesale markets, Banque de France is encouraging financial institutions to develop practical applications for tokenisation, including a possible clearing mechanism for tokenised bank deposits settled in central bank money.
