The European Central Bank (ECB) is advancing its digital euro initiative, planning to select payment service providers (PSPs) in early 2026. A 12-month pilot test is scheduled for the latter half of 2027.
ECB Executive Board Member Piero Cipollone announced that the pilot will involve a select group of PSPs, merchants, and Eurosystem staff. The selection process for participants is expected to commence in the first quarter of 2026.
Cipollone emphasized that the digital euro will be designed to safeguard European card schemes and maintain the central role of banks within the Eurozone's payment ecosystem. Licensed EU PSPs will be pivotal in distributing the digital euro. The pilot offers these providers an early advantage, providing practical experience in onboarding, settlement, and liquidity management.
Cipollone also stated that stablecoins and other private payment solutions pose a threat to banks. He noted Europe's reliance on international card networks like Visa and Mastercard. The digital euro aims to bolster domestic payment systems, such as Italy's Bancomat and Spain's Bizum, by offering a competitive fee structure. The planned merchant fees on the digital euro network will be structured to be lower than international networks but higher than domestic schemes.
This development follows the ECB's decision in October 2025 to move to the next phase of the digital euro project, with an initial launch targeted for 2029. The central bank previously projected a 2027 pilot start if necessary legislation was enacted in 2026.