The European Central Bank (ECB) is moving closer to defining the technical blueprint for a potential digital euro. Piero Cipollone, a member of the ECB’s Executive Board, told European Union lawmakers on Tuesday that the central bank expects to publish the definitive European standards for the digital currency this summer. This foundational step is designed to give payment service providers and merchants ample time to adapt their systems well in advance of any final decision to issue the currency.
A Phased Approach to Technical Readiness
Once the standards—essentially a detailed rulebook—are released, the ECB will collaborate closely with industry participants. The goal is to integrate these specifications into new payment terminals and mobile applications as quickly as possible. Cipollone explained that this proactive approach would allow future hardware and software to ship with the necessary digital euro infrastructure already embedded, providing European businesses with a significant head start.
This preparatory work hinges on the completion of the EU’s legislative process. The ECB anticipates the required legal framework will be in place by 2026. Following that, a comprehensive 12-month pilot phase is scheduled to begin in the second half of 2027. This pilot will rigorously test person-to-person and point-of-sale transactions in a controlled environment. The overarching aim is to achieve full technical readiness for a possible issuance around 2029, contingent on the European Parliament and Council approving the legal basis.
The digital euro: preparing for launch. Source: ECB
Navigating Costs and Long-Term Benefits
A key consideration in the project is cost. Previous ECB analysis, reported by Reuters in February, estimated that banks could incur total costs of 4–6 billion euros over four years to adapt to the digital euro. Cipollone contextualized this figure, noting it represents roughly 3% of the sector’s annual IT maintenance budget. He argued that these upfront investments must be weighed against the long-term strategic benefits, such as retaining more transaction fee revenue within Europe and scaling up domestic payment schemes.
It is critical to understand that the ECB does not envision the digital euro as a direct competitor to commercial bank accounts or a retail product it sells to consumers. Instead, it is designed as a public payments infrastructure. Private intermediaries—including banks and payment firms—would leverage this central bank-backed rail to offer their own wallet and service solutions to end-users. The core objective is to establish a robust, pan-European payment system that reduces reliance on international card networks. Cipollone described a future with “co-badged” cards and bank wallets that can seamlessly switch between national schemes and the digital euro across the entire eurozone.
Complementarity, Inclusivity, and Wholesale Ambitions
Cipollone was clear that the digital euro is meant to complement cash and bank deposits, not replace them. To ensure no one is left behind, accessibility features like voice command functionality and large-font displays are being integrated into the reference app design from the very beginning.
Beyond retail payments, the ECB is also exploring the role of tokenized central bank money in wholesale finance. Cipollone highlighted two key initiatives: the Pontes project, which experiments with settling tokenized securities in central bank money across various distributed ledger technology (DLT) platforms, and the Appia roadmap, aimed at building a tokenized European financial ecosystem. In a separate speech, he elaborated how such tokenized central bank money could serve as a trusted settlement asset for stablecoins and tokenized bank deposits, ensuring that public money remains the “anchor” for future financial markets.
Related: How euro stablecoins could address EU’s dollar concerns
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