ECB Seeks More Businesses for Digital Euro Test

The European Central Bank (ECB) is inviting e-commerce and mobile-commerce merchants in the euro area to join its upcoming digital euro pilot as preparations continue for a possible retail central bank digital currency launch in 2029.

The 12-month trial is scheduled to begin in the second half of 2027. It will use a beta version of the proposed currency to simulate different types of payments, including online purchases, mobile transactions, in-store purchases and peer-to-peer transfers.

While the test version will be designed to closely reflect the planned digital euro, it will not be considered legal tender. The ECB intends to use the pilot to evaluate the technology, operational procedures and how users interact with the system.

Businesses Could Determine Digital Euro Adoption

Merchant participation is a critical part of the project because consumers will have limited reasons to use a digital euro unless businesses widely accept it.

Isadora Arredondo, vice president of global policy at Hedera, told CoinDesk via LinkedIn that the biggest challenge may be creating a commercially sustainable system rather than simply explaining the digital euro to consumers.

She said merchants would require incentives to participate on a large scale and that payment processes would need to remain easy for customers.

One possible approach, according to Arredondo, would be for payment service providers to reduce the fees charged to businesses that accept digital-euro payments.

Pilot Includes Banks and Payment Companies

The ECB’s request for merchant participation comes several weeks after it selected 36 banks and payment firms for the testing program.

The pilot will involve the ECB, the 19 national central banks in the euro area and participating merchants. Employees from the ECB and national central banks will act as users during the experiment.

Testing will cover both online and offline person-to-person transfers, payments at physical retailers, e-commerce purchases and mobile-commerce transactions.

The ECB expects the pilot to begin during the second half of 2027 and continue for 12 months. The central bank is targeting 2029 for potential issuance, although the launch would require the relevant legislation to be completed and a separate approval from the Governing Council.

Stablecoins Remain a Key Concern

The legal framework for the digital euro has yet to be finalized, but the ECB continues to move forward with development and testing.

The institution has raised concerns about the increasing adoption of privately issued dollar-backed stablecoins such as Tether’s USDT and Circle Internet’s USDC.

The ECB views greater reliance on such private dollar-based digital currencies as a potential threat to Europe’s monetary autonomy. Developing a digital euro would give the region a public digital payment option while strengthening its position in an increasingly digital financial system.