“Following PwC in June, the ECB presented its own assessment of the costs of a digital euro for banks in the Eurozone. Thanks to extensive cost synergies, their initial investment over the first four years, estimated at EUR 18 billion by PwC, would, according to the ECB, be within a more modest range (between EUR 4 and 5.77 billion). But this amount, which has attracted a lot of attention, is not the only issue at stake, as the recurring cost of replenishing banks’ reserves with the Eurosystem could, in the long term, weigh more heavily on financing conditions. On 29 October, the Governing Council of the European Central Bank (ECB) began a new step in preparation for the digital euro and published an indicative timetable for its launch. Subject to the adoption of a legislative framework by the European Parliament and the Council in 2026, a pilot exercise could start in 2027 and the ECB could issue its digital currency as early as 2029. This project is raising concerns among banks in the Eurozone, not because of its perfectly laudable objective (preserving European sovereignty), but because of the proposed terms (see, for example, the open letter published last week by the EPI2 ).”
Morten W. Langer
