ECB targets digital euro issuance by 2029, pilot set for 2027
European Central Bank aims to be ready for first issuance of digital euro in 2029. Pilot project involving real transactions could begin as early as mid-2027.
Executive Board member Piero Cipollone said on Feb. 18 that current preparation phase has been underway since November 2025, focusing on technical development, market engagement and support for legislative process.
ECB is working on assumption that EU co-legislators will adopt regulation establishing digital euro during 2026. Once adopted, central bank would move to final stage and decide on issuance.
12-month pilot and four use cases
Pilot will run for 12 months in controlled Eurosystem environment. Limited number of banks, payment service providers and merchants will take part, with participant selection expected to start in first quarter of 2026.Four use cases will be tested during pilot. ECB plans to use feedback to refine design, infrastructure and go-to-market strategy ahead of broader rollout.
Regulator says pilot will allow banks and payment firms to prepare IT systems, assess costs and help shape final product model.
Banks at core of distribution model
Digital euro is expected to be distributed through licensed EU banks and payment institutions. ECB stresses this approach will preserve customer relationships and prevent disintermediation.Safeguards include holding limits, no remuneration and automatic transfer of excess balances to bank accounts. Businesses will not be allowed to hold digital euro balances.
Compensation model предусматриes capped fees and no scheme charges for banks. According to ECB, this could reduce costs compared with international card networks.
Push for European payment infrastructure
Digital euro will be integrated into existing payment solutions, including cards and digital wallets. Co-badging model would allow domestic schemes to rely on pan-European acceptance network without heavy investment.
ECB also foresees offline functionality and legal tender status. EU Council in December 2025 backed key elements of regulation, including mandatory bank distribution and free basic services for consumers.
Why it matters for markets
Digital euro project is seen as effort to strengthen EU strategic autonomy in payments amid dominance of international card schemes and growing role of global fintech firms. Fee caps and removal of scheme charges could increase competitive pressure on traditional players.At same time, success will depend on balance between regulatory requirements and commercial incentives for banks. If 2027 pilot confirms technical readiness and market demand, digital euro could become largest central bank digital currency project among advanced economies.
Recall that on December 19, 2025, the Council of the European Union agreed on a position on the digital euro, supporting the simultaneous launch of online and offline functionality.
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