The ECB is building a central bank digital currency designed to give Europe control over its own payments infrastructure, but displacing entrenched US firms is proving harder than expected.
The Eurosystem has invited payment service providers (PSPs) to take part in a pilot testing the digital euro.
The European Central Bank (ECB) announced the initiative on 5 March 2026, describing it as part of the ECB Governing Council’s decision to move to the next phase of the digital euro project.
The digital euro is a proposed central bank digital currency (CBDC) issued directly by the ECB to serve as a digital alternative to cash, with the bank aiming for widespread availability across the euro area around 2029. However, what “adoption” means in practice, whether voluntary availability or mandated merchant acceptance, remains a contested point in the ongoing legislative process.
In a bid to encourage PSPs to sign up for the pilot, the ECB has published technical, operational and procedural information alongside the call. While this allows PSPs to assess the opportunity in detail before submitting an application, the ECB has stated there is already firm interest in the pilot from a range of stakeholders.
How PSPs will participate
The pilot is scheduled for the second half of 2027 and will run for 12 months. It will test the digital euro in a controlled environment, aiming to validate technical functionality, operational processes and overall user experience.
Selected PSPs will sign a participation agreement with their national central bank and work closely with Eurosystem technical and operational teams. Applications will be assessed based on eligibility, regulatory compliance, technical capabilities, operational experience, market presence and delivery track record. The ECB has not disclosed how many PSPs will be selected, and the application deadline is set for 14 May 2026.
Participants will not be paid, though the ECB has not elaborated on what commercial incentive PSPs should expect beyond the opportunity to shape and experience the system ahead of its launch.
There has been significant emphasis placed on including PSPs from across the euro area, given the digital euro’s ambition to be widely used across many countries and markets.
The ECB has published a dedicated FAQ section and will host an online focus session on 20 March 2026, giving applicants a chance to ask questions and engage with the Eurosystem.
The digital euro: Ambitious, but still in progress
The digital euro is one of the most ambitious payments projects in recent decades, but the ECB considers it necessary for two primary reasons.
The first is ensuring people can continue to use a risk‑free form of money issued by the central bank in the digital age, rather than relying on private bank deposits or commercial payment platforms. The second, and perhaps more politically charged, is strengthening Europe’s payments sovereignty.
A significant share of European digital payments currently depends on companies such as Visa, Mastercard and PayPal. The EU views this reliance as a strategic vulnerability.
ECB President Christine Lagarde has consistently highlighted the point, warning that dependence on foreign payment systems is “a political statement concerning the sovereignty of Europe.”
However, reducing this reliance is anything but straightforward and appears to be more challenging than initially anticipated. Consumer habits, entrenched merchant infrastructure and the political complexity of introducing a new currency format all present structural obstacles, and the article’s own acknowledgement that progress is harder than anticipated raises questions it perhaps does not answer.
Interest in the digital euro is nonetheless growing, as demonstrated by a breakfast debate in Brussels on 13 March 2026. The event will feature Fernando Navarrete, the rapporteur of the European Parliament on the digital euro file – the MEP leading the legislation through Parliament – making his presence politically significant.
Titled “Towards European Sovereignty in Payments: The Role of the Digital Euro,” the discussion underlines how central the sovereignty argument has become to the project’s political case. Corporate sponsorship of EU policy events is commonplace in Brussels. Even so, the fact that this particular event – focused explicitly on reducing dependence on US payment networks – is sponsored by Mastercard, one of the very companies whose dominance is under discussion, is a tension worth noting. Neither the ECB, Parliament nor Mastercard is quoted in the article on the point.
