The digital euro pilot project that the European Central Bank has planned is about to come to fruition. The selection of payment service providers is anticipated to start in the first quarter of 2026, with a testing phase set for the second half of 2027.
In a meeting with the Italian Banking Association, Piero Cipollone, a member of the ECB Executive Board, provided the update and outlined the next operational stages in the central bank digital currency (CBDC) plan. The pilot will involve a limited group of payment providers, merchants and Eurosystem staff, enabling a controlled environment for evaluating technical performance and user experience.
Early operational exposure to onboarding, settlement and liquidity management needs will be provided to the payment service providers, who will participate in the pilot phase. It is anticipated that this early involvement will assist institutions in planning staffing and infrastructure investments prior to a wider rollout.
The digital euro is intended to supplement current payment methods, not to replace them, as the ECB has underlined. Cipollone pointed out that regional payment sovereignty may be strengthened by integrating domestic European payment systems like Spain’s Bizum and Italy’s Bancomat with the digital euro framework.
The initiative also aims to preserve the role of banks in Europe’s financial ecosystem. The potential for private payment systems, such as international card networks and stablecoins, to lessen the role of banks in routine transactions has alarmed policymakers. The goal of the digital euro is to provide a publicly supported alternative that promotes innovation and preserves financial stability.
Additionally, merchant fee arrangements are emphasised. In order to maintain competitiveness and promote the sustainability of the infrastructure, Cipollone stated that fees inside the digital euro network would probably lie between those imposed by local payment systems and foreign card networks.
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