European Central Bank advances digital euro and payment transformation strategy

The European Central Bank (ECB) is actively developing the digital euro, with the investigation phase running from October 2021 to October 2023, and the preparation phase from November 2023 to October 2025. The pilot is scheduled to start in the second half of 2027, lasting 12 months, with a potential first issuance planned for 2029, contingent on legislative approval.

The ECB’s strategy focuses on transforming payments through digitalisation, new technologies like distributed ledger technology (DLT), and strengthening resilience. The strategy aims to support an integrated, innovative, and competitive European payments market, covering retail, wholesale, and cross-border payments.

The digital euro will be a digital form of cash available across the euro area, both online and offline, complementing cash and providing more payment choices. EU-licensed payment service providers will be central to digital euro distribution, working with banks to ensure customer access, safeguards, and fair compensation.

The ECB is also exploring tokenised central bank money to enhance efficiency and innovation in capital markets, addressing fragmentation and interoperability issues. Initiatives like Pontes and Appia support the development of a tokenised ecosystem for wholesale transactions, with launches planned for September 2026.

In addition, the ECB is committed to improving cross-border payments by exploring interlinking systems and participating in international projects like Project Agorá, aligned with G20 objectives. The Eurosystem’s multi-currency settlement service (TIPS) will facilitate instant, end-to-end settlement in central bank money for multiple currencies.

More information and updates are available on the ECB’s dedicated webpages for the digital euro, settlement of DLT-based transactions, and cross-border payments.