In November 2023, the European Central Bank (ECB) began the preparation phase of a digital euro. Just over a year later, it has published its second progress report on the phase, laying out the foundations for the potential issuance of the currency.
In the time since the initial preparation phase, the ECB has updated its digital euro scheme rulebook to harmonise digital euro payments across the euro area. Beforehand, there was an interim review carried out by members of the Rulebook Development Group, representing the views of consumers, retailers and payment service providers.
The updated draft also included input from seven new workstreams, launched in May 2024 to further develop key sections of the rulebook, including minimum user experience standards and risk management.
In January 2024, the ECB put out a call for potential providers of digital euro components and related services. It has now concluded this call and invited selected bidders to tender. The outcome of this procedure will be published on the ECB’s website when it has been finalised in 2025.
Up to date
At the same time, the ECB has been conducting new user research and experimentation activities to gather insights into users’ preferences. These tests will also be used to inform decision-making for a possible digital euro.
Both quantitative and qualitative engagements are foreseen in the coming months, including online surveys and interviews. These will focus on special target groups, such as small merchants and vulnerable consumers. The findings will be published in mid-2025.
Working with the industry
The digital euro project is a European initiative being developed for the benefit of millions of citizens across the euro area. Engagement with external stakeholders, ranging from policymakers and market participants to the general public, is a key priority. The ECB is committed to continue working closely with all stakeholders involved and to regularly communicate project developments to the wider public, engaging with all euro area citizens.
Following a call launched in November, the ECB will join with key stakeholders, including merchants, payment service providers, fintech companies and universities, to form innovation partnerships to test conditional payments (i.e payments that are made automatically when predefined conditions are met). It will also explore other innovative use cases for a digital euro.
An outcome report is expected to be published in July 2025.
In parallel, the ECB is working with experts from the national central banks of the Eurosystem and national competent authorities to develop a methodology for setting digital euro holding limits, balancing user experience with monetary policy and financial stability implications.
This work will allow the ECB to determine the factors to be considered in the calibration, and to propose a methodology to calibrate the digital euro holding limits. It includes consultation with market participants through the European Retail Payments Board and also relies on granular bank data specifically collected for this purpose. The proposed method will be tested in a first analysis in the course of 2025.
The ECB’s Governing Council will decide on the possible issuance of a digital euro only once the relevant legislation has been adopted.
