The introduction of the digital euro will cost European banks between 4 and 6 billion euros. This is the official estimate from Piero Cipollone, member of the ECB's Executive Board. Cipollone disclosed the figure before an Italian parliamentary committee.
Implementation costs span four years and represent roughly 3 percent of banks' annual IT maintenance budgets. For the ECB itself, setup costs amount to around 1.3 billion euros. Starting in 2029, the central bank expects annual operating costs of approximately 300 to 320 million euros. The Eurosystem will bear these expenses similarly to banknote production. For the first time, concrete cost estimates are now available for a project set to fundamentally reshape Europe's payment infrastructure.
Europe's dependence on US payment systems as a strategic risk
Behind the digital euro lies a geopolitical calculation. Over three-quarters of all card transactions in Europe run through international payment systems such as Visa and Mastercard. Thirteen eurozone countries depend entirely on these international networks, as no domestic card systems exist there.
Cipollone described this dependence as a strategic risk. Transatlantic tensions have sharpened the assessment. At the same time, dollar-pegged stablecoins like USDC and USDT are growing rapidly, putting additional pressure on the ECB's monetary sovereignty.
The planned fee structure reflects this calculation. Merchants would pay less than they do with Visa or Mastercard. Small merchants could even pay just half of current fees. Yet fees remain higher than those of national systems like Italy's Bancomat or Spain's Bizum. As a result, competitive pressure builds on international providers without displacing local infrastructure.
Banks as winners: data, not just fees
The ECB deliberately positions the digital euro as a project that protects banks. Cipollone argued before the Italian Banking Association ABI that banks should have an existential interest in the project.
"Banks would lose not only revenue, but, more importantly, access to their customers' payment data, information they need to offer them other, more profitable services." - Piero Cipollone, member of the ECB's Executive Board
In practice, banks retain their central role as wallet providers within the digital euro system. They manage the digital wallets and hold exclusive access to customer payment information. Meanwhile, the ECB itself sees only anonymized transaction codes, not user identities. This secures banks' data foundation for cross-selling loans, insurance, and asset management products.
Banks can also recoup implementation costs through merchant fees. Since the ECB does not charge network fees, the usual costs for private payment networks fall away. In addition, non-interest-bearing balances with holding limits prevent deposits from flowing out of bank accounts into the digital euro during times of crisis.
Legislative breakthrough after two years of gridlock
The European Parliament gave its first significant approval for the digital euro in February 2026, ending a two-year standstill. A change of rapporteur from Stefan Berger to Fernando Navarrete Rojas in December 2024 appears to have accelerated the process.
Already in December 2025, the EU Council agreed on a negotiating position. Key features remained intact, including legal tender status, mandatory merchant acceptance, and offline functionality. The project's preparation phase ran from November 2023 to October 2025. During this time, the ECB drafted the rulebook, selected providers for system components, and operated an innovation platform for market experiments. Since November 2025, the project has moved into the technical readiness phase.
ECB research from the preparation phase found that the digital euro could promote competition in the European payments market. Also, 66 percent of surveyed Europeans expressed interest in the project. Beyond the digital euro, the ECB advances additional infrastructure projects, including Pontes, a DLT-based settlement solution, and the expansion of the TIPS system for cross-border instant payments.
Privacy debate and cash coexistence
Cipollone addressed critics of the digital euro directly. Surveillance concerns are "fake news," he said. Technically, privacy protection relies on a separation of duties. The ECB processes only anonymized transaction codes, while banks exclusively manage user identities. According to the ECB, the privacy level resembles that of cash, while anti-money laundering requirements remain fulfilled.
In parallel, the ECB modernizes its banknotes. President Christine Lagarde announced a redesign in October 2025. Rather than replacing physical cash, the digital euro will complement it as a digital variant. Offline functionality will enable payments even during connectivity outages.
Selection of payment service providers begins in March 2026. The European Parliament will likely vote in June 2026. If the regulation passes in 2026, a pilot project could launch from mid-2027. The ECB targets 2029 for the first official issuance of the digital euro.
