ECB Looks to Merchants to Help Test Digital Euro Payments

Digital Euro Testing Expands

The European Central Bank (ECB) has asked e-commerce and mobile-commerce merchants across the euro area to take part in its planned digital euro pilot as it prepares for a potential retail CBDC launch in 2029.

The 12-month pilot is scheduled to begin in the second half of 2027. It will use a beta version of the proposed digital euro to test several payment types, including online and mobile purchases, transactions at physical stores and transfers between individuals.

The pilot currency will closely resemble the eventual digital euro but will not have legal-tender status. The ECB plans to assess the system’s technology, operating procedures and user experience during the trial.

Merchant Support Seen as Essential

The ECB’s effort to bring merchants into the program reflects the importance of widespread acceptance. Consumers are unlikely to adopt the digital euro on a meaningful scale unless they can use it at a broad range of businesses.

Isadora Arredondo, vice president of global policy at Hedera, told CoinDesk via LinkedIn that the commercial side of the project could present a greater challenge than communicating its benefits to consumers and the public sector.

Arredondo said businesses would need incentives to participate in sufficient numbers, while payment systems would also need to ensure customers can use the digital euro without unnecessary obstacles.

She suggested that payment service providers could encourage merchant adoption by lowering the fees businesses pay to accept digital-euro transactions.

36 Financial Firms Already Selected

The ECB’s latest invitation comes weeks after it selected 36 banks and payment companies to participate in the testing phase.

The pilot will include the ECB, the 19 national central banks in the euro area and selected merchants. Employees of the ECB and national central banks will act as test users during the program.

Participants will conduct both online and offline peer-to-peer transfers, in-store payments, e-commerce purchases and mobile-commerce transactions.

The trial is expected to run for 12 months from the second half of 2027. The ECB has set 2029 as the target for possible issuance, but the launch depends on the required legislation being approved and a separate decision by the Governing Council.

ECB Concerned About Dollar Stablecoins

Although the legislation needed to introduce the digital euro has not been finalized, the ECB continues to develop and test the system.

The central bank has pointed to the growing use of privately issued dollar-backed stablecoins, including Tether’s USDT and Circle Internet’s USDC, as a potential challenge to Europe’s monetary autonomy.

The ECB’s continued work on the digital euro reflects its effort to maintain a European alternative in digital payments and limit the potential influence of private, dollar-denominated digital currencies across the region.