Cash and the digital euro: two sides of the same coin

The European Central Bank highlighted strong parliamentary support for the digital euro following its adoption of the Single Currency Package, which would provide legal certainty and enable preparations for a potential first issuance. A delay in adopting the Regulation could postpone the digital euro’s introduction, increase reliance on foreign providers, and hinder European innovation in payments. The ECB emphasized that timely progress is essential to strengthen Europe’s autonomy in payments amid an uncertain geopolitical environment.

The ECB also reported on the Pontes platform, launched in September, which connects distributed ledger technology platforms with the Eurosystem’s TARGET Services. The platform has onboarded 18 market participants and facilitated the settlement of the European Stability Mechanism’s first digitally native benchmark bond of €1 billion, marking a shift from experimentation to adoption in tokenised finance.

Preparations for the digital euro pilot are advancing, with a beta version planned for testing technical functionality, operational processes, and user experience starting in the second half of 2027. The pilot will involve Eurosystem staff, selected payment service providers, and merchants offering everyday services, including canteens and online payments. In July, the ECB announced the selection of 36 payment service providers from over 50 applicants to participate in the pilot.

The ECB is also working on a phased rollout of the digital euro, with plans to ensure all relevant use cases are technically available from first issuance. Feedback from market participants suggests a gradual rollout would support a smooth first issuance. Additionally, the ECB invited Europeans to share their views on ten shortlisted design proposals for new euro banknotes, receiving nearly 10 million responses, which will inform the final design decision expected by the end of the year.