Investing.com — The European Central Bank is moving closer to a landmark decision on the launch of a digital euro, with preparations already “well advanced,” according to UBS.

Among major Western central banks, “the ECB is showing the greatest ambition regarding the introduction of a central bank digital currency (CBDC),” the analysts wrote.

They noted the Bank is waiting for the European Parliament and Council to adopt enabling legislation before the Governing Council can make a final decision.

Assuming that happens in the first half of 2026, “the ECB would need another 2½–3 years for technical preparations so that the digital euro might be launched as early as 2028, but probably more likely in 2029 or 2030.”

UBS said it is “likely that the digital euro will come,” with the ECB increasingly viewing the project as a tool to preserve “monetary sovereignty and strengthen Europe’s strategic autonomy in a shifting geopolitical environment.”

The rise of crypto assets, advances in payments technology, and the U.S. GENIUS Act fueling stablecoins have sharpened the ECB’s defensive rationale.

The planned digital euro would be a retail CBDC with legal tender status, complementing but not replacing cash.

UBS highlighted design features aimed at limiting risks to banks: “upper limits (of perhaps €3,000–4,000) and in unremunerated form (i.e. paying zero interest).”

Still, scepticism remains. UBS said “the ECB’s greatest challenge might be to convince the public to adopt the digital euro,” warning it could become a target for activists and conspiracy theorists.