The European Central Bank is calling on e-commerce and mobile commerce merchants in the euro zone to participate in a 12-month digital euro pilot scheduled to begin in the second half of 2027.
The pilot will test a beta version of the currency that resembles the digital euro but will not be legal tender. Testing will cover online and offline payment scenarios, including transfers between individuals, in-store purchases, e-commerce transactions, and mobile commerce payments.
The ECB selected 36 banks and payment firms to participate in the testing phase, which will involve ECB staff, national central bank staff from the 19 euro-area countries, and participating merchants. The central bank is targeting possible issuance of the digital euro in 2029, subject to legislation and a separate Governing Council decision.
Merchant Participation Critical to Success
Broad merchant acceptance is viewed as essential to the project's viability. For consumers to adopt a digital euro, sufficient places to spend it must be available, making merchant participation both a technical and commercial question.
Merchant incentives may play a key role in driving participation. One potential approach could involve payment service providers lowering the fees that merchants pay to accept digital euro payments, according to industry observers.
Policy Goals
The ECB views the digital euro as necessary to safeguard Europe's monetary sovereignty and reduce reliance on dollar-backed stablecoins. The adoption of private stablecoins pegged to the U.S. dollar, such as those issued by Tether and Circle Internet Financial, is considered a threat to Europe's monetary autonomy.
