ECB updates on digital euro development and legislative process

The European Central Bank (ECB) held an executive committee meeting on 18 February 2026 to discuss the digital euro project.

The investigation phase ran from October 2021 to October 2023, focusing on concept definition, technical exploration, and design proposals. Since November 2025, the current phase involves ongoing preparations based on a flexible, modular approach, aiming for a potential first issuance in 2029, contingent on legislative adoption in 2026.

The digital euro will fit into the payment ecosystem with banks and payment service providers (PSPs) at the core of distribution. EU-licensed PSPs will distribute the digital euro, maintaining customer relationships and implementing safeguards such as holding limits and no remuneration. Banks will be compensated for their distribution role.

The proposed compensation model aims to generate cost savings for PSPs by capping merchant service charges and inter-PSP fees, with no scheme or processing fees paid by issuing and acquiring banks.

The digital euro will coexist with private solutions like digital wallets and private schemes, acting as a fallback and enabling informed consumer choices. It will also integrate with existing physical and digital payment solutions through co-badging, reducing reliance on international card schemes and fostering pan-European acceptance.

A 12-month pilot is planned to start in the second half of 2027, involving real-world transactions with selected PSPs, merchants, and Eurosystem staff. The pilot aims to test four use cases, gather feedback, and optimize the digital euro’s design and readiness.

The legislative process involves trialogues, with the European Parliament adopting its position in May 2026 and the Council of the European Union adopting its position on 19 December 2025. The regulation is expected to be adopted in 2026, with issuance targeted for 2026, following a minimum two-year process. Key legislative changes include fee caps, flexible funding options, cash services, and enhanced user interfaces.

Additional materials and updates are available on the ECB’s webpage and via email at digitaleuro@ecb.europa.eu.