The European Central Bank left its key interest rate unchanged at 2.25% on Thursday, a widely expected decision as inflation in the euro zone remains above target. At the same time, the ECB released version 0.91 of the digital euro rulebook, pushing forward its plan for a central bank digital currency.
Rate decision: steady as expected
The ECB’s governing council held the deposit facility rate at 2.25%, pausing after a series of cuts earlier this year. The decision comes as euro-area inflation, though down from its peak, still hovers above the bank’s 2% goal. ECB President Christine Lagarde said the bank will continue to assess incoming data before making further moves. No new economic projections were released at this meeting.
Digital euro rulebook update
Alongside the rate decision, the ECB published the latest draft of its digital euro rulebook, version 0.91. The document lays out technical standards, user protections, and interoperability requirements for the planned central bank digital currency. The ECB has said it aims to launch the digital euro by 2029, though the final decision on issuance still rests with the European Parliament and member states.
The rulebook is a living document, updated as the ECB consults with stakeholders including banks, payment service providers, and consumer groups. Version 0.91 includes refinements to privacy safeguards and offline functionality, according to the ECB. The bank expects to release a final version after the legislative process is complete.
What the digital euro would mean
The digital euro would be a digital form of cash, issued by the central bank and available to all euro-zone residents and businesses. It would complement physical banknotes and coins, not replace them. The ECB has stressed that the digital euro would be free for basic use and would not earn interest, aiming to avoid destabilizing the banking system by pulling deposits away from commercial lenders.
Privacy has been a major concern. The ECB says the digital euro would offer a higher level of privacy than private digital payments, but not full anonymity — a compromise to comply with anti-money-laundering rules. The rulebook v0.91 adds more detail on how transaction data would be handled.
The launch target of 2029 remains ambitious. The European Commission proposed a legal framework in 2023, but negotiations in the European Parliament and Council are still ongoing. Without a final law, the ECB cannot move to the development phase.
For now, the bank is focused on the rulebook and on testing the technical infrastructure. A prototype is expected to be ready by late 2025, with a pilot phase possibly starting in 2026. The next major update to the rulebook is expected in mid-2025.
