The European Central Bank aims to be ready for a potential first issuance of the digital euro in 2029, assuming the current legislative process concludes by the end of 2026. Piero Cipollone, a member of the ECB’s Executive Board, outlined this timeline alongside updates on the Eurosystem’s broader payments strategy, including the recent launch of the Pontes platform for tokenised asset settlement.
Digital Euro Legislative and Pilot Timeline
Legislative negotiations for the digital euro are currently in the trilogue phase. The Council of the EU agreed on its position in December 2025, and the European Parliament adopted its stance in July 2026. The European Council has called for these negotiations to conclude by the end of this year.
Preparations for implementation are proceeding in parallel. A pilot phase involving 36 selected payment service providers is scheduled to begin in the second half of 2027 and run for 12 months. On 15 September, the Eurosystem launched a call for e-commerce and mobile-commerce merchants to participate in this pilot.
Cipollone stated that basic use of the digital euro would be free for consumers. The design includes offline functionality for payments without an internet connection and offers cash-like privacy, ensuring personal transaction details remain known only to the payer and payee.
Pontes Platform and Tokenised Assets
In wholesale markets, the Eurosystem launched Pontes on 21 September to connect market distributed ledger technology (DLT) platforms with TARGET Services. This infrastructure enables the settlement of tokenised asset transactions in central bank money.
Last week, Pontes successfully settled a €1 billion transaction in benchmark bonds issued on DLT by the European Stability Mechanism. This milestone builds on exploratory work conducted in 2024, where 64 participants completed more than 50 trials, settling nearly €1.6 billion in central bank money via DLT-based transactions.
The Eurosystem is also developing Appia, an initiative addressing the architecture, standards, and governance of a European tokenised financial ecosystem. The project aims to deliver a blueprint in 2028. A recent public consultation on the Appia roadmap received 127 responses, with 90% of respondents submitting at least one proposal.
Strategic Autonomy and International Links
The Eurosystem’s comprehensive payments strategy focuses on four objectives: ensuring central bank money settles transactions as technologies evolve, strengthening Europe’s resilience and strategic autonomy, fostering an integrated competitive payments ecosystem, and supporting the international role of the euro.
Highlighting strategic dependencies, Cipollone noted that 13 euro area countries rely entirely on non-European companies for in-store card payments. To address resilience, the Eurosystem continues to expand its instant payment capabilities.
TIPS, the Eurosystem’s instant payment settlement service, currently supports the euro, Swedish krona, and Danish krone, with the Norwegian krone and Icelandic króna set to join in coming years. A clone of TIPS developed by Banca d’Italia is fully operational in Bosnia and Herzegovina and Montenegro, processing close to 30,000 transactions per day as of early November. Launches in Albania, Kosovo, and North Macedonia are imminent.
Internationally, work is advancing on a bilateral link between TIPS and India’s Unified Payments Interface. The Eurosystem is also exploring connections with Nexus Global Payments in South-East Asia, as well as instant payment systems in Switzerland, Brazil, and Canada.
Euro Banknote Renewal
Alongside digital developments, the physical euro is undergoing a design renewal. More than 31 billion euro banknotes, worth over €1.6 trillion, are currently in circulation. Almost ten million people participated in a public survey on shortlisted design proposals this summer, with two-thirds of responses coming from individuals under the age of 35.
The ECB’s Governing Council expects to decide on the final design concept around the end of this year. The new banknotes are scheduled to enter circulation gradually from the early 2030s, while existing notes will remain valid.
