Test that goes beyond the laboratory
According to Fakt today, more than 50 candidates from the euro zone applied to the program. The ECB selected traditional banks, digital banks and payment firms, including Deutsche Bank, UniCredit, Revolut, Adyen and Stripe.
For twelve months they will cooperate with the ECB and 19 national central banks of the euro zone, excluding Bulgaria and Malta. The stakes are concrete. Participants will test the technology, processes and convenience of using digital euro in person-to-person and business-to-consumer payments, online and offline. The system must work both online and offline.
For consumers this means a new tool for everyday purchases, and for merchants another way to receive payments. For banks and payment operators it is a necessity to prepare infrastructure before a final decision on issuance is made.
Digital money, but not against cash
The biggest concern is whether digital euro will displace traditional banknotes. The ECB responds that it will not. Christine Lagarde stresses that both forms will operate in parallel as legal tender, and cash will remain a fixed element of the European monetary system.
The new currency will be free of charge for citizens via regulated payment service providers. It will not accrue interest, and limits per person aim to curb the risk of a mass outflow of deposits from commercial banks.
The ECB also seeks to neutralise a second trigger point: data protection. Therefore, before implementation it wants to test not only the technology but also the processes and usability of the entire solution.
Europe wants to regain control over payments
The project has a dimension larger than convenience at the checkout. Most electronic payments in Europe today rely on American networks such as Visa and Mastercard, and some also on non‑EU solutions. Digital euro aims to reduce this dependence and strengthen the EU’s strategic autonomy.
The road to implementation remains political. The European Parliament, the Council and the European Commission are negotiating regulations that the ECB cannot issue currency without. The plan calls for adopting a legal framework in 2027, and for widespread availability of digital euro two years later. Delays in negotiations will push this date back. Piero Cipollone of the ECB Board views the strong interest in the pilot as a signal of the private sector’s readiness.
