Key Highlights
- The ECB is working with CPACE, Nexo standards, and the Berlin Group to build the digital euro using existing payment systems.
- The digital euro is planned for rollout in 2029, with a pilot test expected to start around 2027.
- The project aims to fix Europe’s fragmented payment system and reduce reliance on foreign payment companies.
The European Central Bank (ECB) is moving forward with its digital euro project after signing an agreement with three European standards groups to support how the currency will work in practice. These include CPACE, Nexo standards, and the Berlin Group.
According to the official announcement, the move is aimed at preparing the system for a possible rollout in the area while reducing the cost and complexity for banks, merchants, and payment providers involved in the process. The rollout is expected in 2029, after testing and preparation.
Building on systems people already use
The bank said the agreement will allow it to reuse existing payment standards that are already used in parts of Europe. These include standards for tap-to-pay card payments, how merchants connect with payment companies, and how people can make transfers using simple details like a phone number instead of long account numbers.
The ECB said the goal is to make digital euro payments familiar and easy, so people and businesses do not have to learn a completely new system from scratch.
ECB official Piero Cipollone explained the plan, stating, “This partnership shows our strong commitment to making sure the digital euro works with existing European standards that the private sector can also use.”
He added that the open standards would give Europe a fair alternative to systems controlled by larger payment companies. He said this would help new companies enter the market and allow merchants and payment providers to feel safer about investing in the system.
At the same time, the ECB said the agreements do not mean the project will be cheap. They are only meant to reduce some of the cost, not remove it. Meanwhile, an earlier report from Reuters estimated that European banks could face costs between €4 billion and €6 billion over four years as they adjust their systems and compliance frameworks to support the digital euro.
Fixing Europe’s payment system gaps
The ECB also pointed out a problem in Europe’s current payment system. Right now, there is no single payment standard used everywhere in Europe. Instead, different countries and companies use different systems, many of which are owned by large international card companies and digital wallet providers.
The bank said this increases complexity for users and adds costs for businesses. The digital euro project aims to address this by creating a more unified system.
Alongside these developments, the ECB is preparing a pilot phase for the digital euro that could begin as early as 2027. The pilot is expected to involve a limited group of payment service providers, merchants, and Eurosystem staff over 12 months. They are expected to test how the digital euro works in real-world conditions, such as paying in shops or sending money between users.
The broader timeline still points to 2029 as the target year for full introduction. The project is also seen as a way to reduce Europe’s reliance on big non-European payment companies like Visa and Mastercard. Also, it is a response to the rise of digital currencies linked to the US dollar.
Moreover, last month, the bank sought technical expertise on the project, signaling a strong effort to strengthen control over its own payment system.
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