Digital euro pilot set for mid-2027, issuance targeted for 2029

Piero Cipollone, Member of the Executive Board of the ECB, outlined the progress of the digital euro project. A pilot exercise is planned for mid-2027, with a potential first issuance targeted for 2029.

Roadmap to a digital currency

The digital euro project has progressed through an investigation phase from October 2021 to October 2023, followed by a preparation phase until October 2025. The current phase, ongoing since November 2025, focuses on technical readiness, market engagement, and supporting the legislative process.

A pilot exercise and initial transactions are anticipated for mid-2027, with the aim to be ready for a potential first issuance of the digital euro during 2029, assuming the EU Regulation is adopted in 2026. The distribution model places EU-licensed payment service providers (PSPs) and banks at its core, ensuring they preserve customer relationships and prevent disintermediation.

Robust safeguards, including holding limits, no remuneration for private holdings, and waterfall functionality, are designed to maintain financial stability.

Banks will receive fair compensation for their distribution efforts, recognizing their critical role.

Rethinking payment economics

The digital euro introduces a new compensation model designed to generate cost savings for PSPs.

This model eliminates scheme and processing fees for issuing and acquiring banks, caps the merchant service charge, and sets a ceiling for the inter-PSP fee.

It also aims to create synergies within the payment ecosystem, enabling co-badging with physical cards to benefit from a pan-euro area acceptance network and reduce reliance on international card schemes for cross-border transactions.

Private solutions can leverage this standardized network to scale without heavy investment.

The upcoming 12-month pilot, starting mid-2027, will involve real-world transactions with limited PSPs and merchants, offering early readiness advantages and dedicated Eurosystem support for participants to test readiness and refine the value proposition.

A pragmatic path, not a revolution

The ECB's detailed roadmap for the digital euro demonstrates a pragmatic approach to innovation, prioritizing integration with existing payment systems and addressing industry concerns.

While not a radical overhaul of the financial landscape, the project's focus on cost savings and European payment independence offers tangible benefits for the euro area.

Its success will hinge on effective collaboration during the pilot and the swift adoption of supportive legislation.