In October 2021, the Eurosystem kicked off the “digital euro” project with a two-year investigation phase. The outcome of this phase was a design concept for a digital euro, which was used as the basis for a legislative proposal by the European Commission on 28 June 2023. 

In mid-October 2023, the ECB Governing Council decided to move to the next two-year stage of the project – the preparation phase. This phase involved: 

1.  pressing ahead with development of a digital euro scheme rulebook;
2. selecting providers for digital euro components and related services;
3. providing an innovation platform for testing with market participants;
4. tasking the Euro Retail Payments Board with investigating how the digital euro would fit into the European payments ecosystem.

On 1 November 2025, the Eurosystem entered the next phase of the digital euro project, which is aimed at preparing the Eurosystem for the potential issuance of the digital euro in the course of 2029.

This phase involves testing the possible infrastructure. In addition, requirements in areas such as user experience, data protection, financial inclusion and environmental impact will be worked out in more detail. As before, this will take place in close consultation with the public, market participants and all stakeholders involved.

In parallel to this, the EU institutions are working on drawing up a legal framework for the digital euro based on the European Commission’s legislative proposal from June 2023. The proposal is currently going through the legislative process in the Council of the European Union and the European Parliament. This process is expected to be concluded at the end of 2026. The ECB must take any additional requests from the legislators into account when designing the digital euro. This means that the digital euro can only be issued once the legislative procedure has been completed and the digital euro law is in place.

Pilot exercise

The ECB Governing Council announced the transition to the next phase of the digital euro project at the end of October. 

During this phase, a pilot exercise will be prepared to ensure the technical readiness of the digital euro. Assuming that the legal basis will be created in the course of 2026, a pilot exercise involving market participants, including selected payment service providers, merchants and end users, could start as of mid-2027. The aim is to gain insights into operational, technical and user-related aspects and to create the basis for a potential first issuance of the digital euro during 2029.

Further information on the planning and implementation of the pilot exercise as well as the next steps will be announced here shortly.