ECB outlines digital euro development and payment strategy

The European Central Bank (ECB) has outlined its strategy for the development of a digital euro and the modernization of the European payments market. The strategy aims to support an integrated, innovative, and competitive payments landscape across Europe.

The ECB emphasizes the importance of digitalization, new technologies such as distributed ledger technology (DLT), and resilience in shaping future payments. The strategy covers wholesale, retail, and cross-border payments, with a focus on digital euro issuance and tokenized central bank money.

The digital euro is envisioned as a digital cash form available across the euro area, both online and offline. Its distribution will rely on EU-licensed payment service providers, with banks playing a key role in maintaining customer relationships and ensuring security. The initiative aims to establish a European acceptance infrastructure and foster private sector innovation.

The development phases include an investigation phase (October 2021 – October 2023), a preparation phase (November 2023 – October 2025), and ongoing efforts towards technical readiness, market engagement, and legislative support. A pilot is planned for 2027, with potential issuance targeted for 2029, contingent on EU legislative adoption.

Additional initiatives include tokenization of assets, improving cross-border payments through interlinking systems, and supporting multi-currency settlement. The ECB collaborates with private partners like Pontes and Appia to develop interoperable DLT ecosystems and settlement platforms.

Further information, progress reports, and FAQs are available on the ECB’s dedicated webpage for the digital euro and related payment innovations.