Digital euro project: ECB closes preparation phase and moves to the next stage

The European Central Bank has published its Closing Progress Report on the digital euro preparation phase and, one day later, confirmed it is moving the project to the next stage. Below is a concise, fully sourced briefing you can share with your board, product, and policy teams. (European Central Bank)

What just happened

• Closing Progress Report published. The ECB summarises two years of work from November 2023 to October 2025, covering rulebook development, provider selection, experimentation, technical design, and stakeholder engagement. A decision on whether to issue a digital euro will be taken only after EU legislation is adopted. (European Central Bank)

• Next phase launched. On 30 October 2025 the ECB announced it is moving to the next phase to build technical capacity. If co-legislators adopt the Regulation during 2026, pilots could start in 2027 and the Eurosystem aims to be ready for a potential first issuance during 2029. (European Central Bank)

Key takeaways for industry

1) Draft rulebook reached market consultation

• A first interim draft appeared in January 2024, received about 2,000 unique comments by April 2024, and a revised draft was delivered in June 2025. The four-month market consultation ended in October 2025. The draft adds minimum UX standards, brand usage rules, dispute management, onboarding, and testing/certification frameworks to ensure a standardised experience across the euro area. (European Central Bank)

Source:  European Central Bank

2) Service providers have been selected

The Eurosystem completed tenders for five Digital Euro Service Platform components, signing framework agreements with the top two ranked providers in each category:

• Alias lookup: Sapient & Tremend; equensWorldline Germany

• Risk and fraud management: Feedzai; Capgemini Deutschland

• App and SDK: Almaviva & Fabrick; Sapient & Tremend

• Offline solution: Giesecke+Devrient advance52 & G+D Currency Technology; equensWorldline Germany

• Secure exchange of payment information: Senacor FCS; equensWorldline Germany

All providers are EU nationals controlled by EU nationals. These contracts do not create financial commitments yet. Six national central banks will deliver the core components: Banca d’Italia, Banco de España, Banque de France, Deutsche Bundesbank, Lietuvos bankas, and Oesterreichische Nationalbank. (European Central Bank)

3) Experiments show demand and guide long-term vision

Around 70 market participants joined the ECB’s innovation platform to test added-value services, including conditional payments. The outcome report, published on 26 September 2025, highlights demand for harmonised standards and flexible architecture to reduce fragmentation. (European Central Bank)

4) Technical design choices are getting specific

• The ECB confirms a synchronous REST interface between PSPs and the back-end to enable real-time processing at scale, with strong cryptography and fraud-detection support. (European Central Bank)

• Offline capability remains a design pillar and is part of the procured components, targeting a bearer-like instrument that can work without connectivity. (European Central Bank)

Source:  European Central Bank

5) Holding limit work is a technical analysis, not a policy choice

At the request of co-legislators, the ECB analysed financial-stability effects across hypothetical €500 to €3,000 per person holding limits under both business-as-usual and extreme flight-to-safety scenarios. The ECB stresses this is a technical response, not the ECB’s position on an appropriate level. (European Central Bank)

6) Costs and resourcing are clearer

ECB analysis estimates euro area banks would need to invest €4.0–€5.8 billion over four years to connect and adapt systems. The ECB would not charge transaction fees and would cover scheme and infrastructure costs similar to cash, funded by seigniorage. (European Central Bank)

Policy and timeline signals

• Political support: European leaders called on 23 October 2025 to accelerate work on the digital euro. On 29 October 2025 the ECB’s Governing Council decided to continue preparations and move to the next phase. (European Central Bank)

• Pilot and issuance targets: Subject to legislation in 2026, pilots could start in 2027, with the Eurosystem aiming to be ready for a possible first issuance during 2029. (European Central Bank)

• Cash remains. The digital euro is meant to complement cash and carry cash-like benefits in digital form, including privacy and universal availability. (European Central Bank)

What this means for payments providers and merchants

1. Prepare for the rulebook. Expect further iterations as feedback from the four-month consultation is integrated. Plan for adherence, certification, dispute management, and UX baseline requirements across all basic services. (European Central Bank)

2. Align your tech plans. The DESP interface strategy points to synchronous REST. Start mapping integration paths, latency budgets, alias directories, fraud-management tooling, and secure data-exchange components. (European Central Bank)

3. Design for offline from day one. The offline solution is a formal workstream and a procured component. Think device security, key management, and merchant acceptance in low-connectivity settings. (European Central Bank)

4. Budget prudently. Internal estimates in the ECB report give a credible band for sector-wide spend. Use the €4.0–€5.8 billion total as a sector benchmark and calibrate your own capex and vendor plans accordingly. (European Central Bank)

5. Track connectivity procurement. The ECB has opened applications for digital euro network connectivity services. If you operate network infrastructure or gateways, monitor that process closely. (European Central Bank)

What to watch next

• Legislative negotiations in Council and Parliament, including legal-tender, acceptance, compensation and access-to-devices topics where the ECB has provided technical input. (European Central Bank)

• Finalisation of the rulebook after consultation, plus detailed implementation specs for payment initiation and risk. (European Central Bank)

• Pilot design and scope if the Regulation is adopted in 2026, including user research follow-ups and merchant pilots. (European Central Bank)

Bottom line

The ECB has closed the preparation phase, set a clear technical and procurement footing, and opened the door to a 2027 pilot and potential readiness for issuance in 2029, if lawmakers deliver the Regulation during 2026. For PSPs and merchants, the direction of travel is now concrete enough to plan integration roadmaps, budget for compliance and UX, and engage early on offline and fraud-management capabilities. (European Central Bank)

Sources

• Closing Progress Report: “Progress on the preparation phase of a digital euro” - ECB, 30 Oct 2025. Key details on rulebook timeline, provider selection, experimentation, technical architecture, holding limit analysis, stakeholder engagement, costs. (European Central Bank)

• Press release: “Eurosystem moving to next phase of digital euro project” - ECB, 30 Oct 2025. Phase timing, pilot and issuance readiness, complementarity with cash. (European Central Bank)