The European Central Bank (ECB) is reaching out to e-commerce and mobile commerce merchants in the eurozone to participate in a 12-month pilot program for a digital euro, set to begin in the latter half of 2027.
This pilot aims to evaluate a beta version of the central bank's digital currency, which will facilitate online and offline payments but will not be recognized as legal tender. The ECB is considering a potential official launch of the digital euro in 2029, contingent upon legislative approval and a decision from its Governing Council.
Merchant participation is crucial for the success of the digital euro, as widespread acceptance is necessary for consumer usage. “Many people think the digital euro’s success will depend on how governments and the public sector explain its usefulness,” stated Isadora Arredondo, vice president of global policy at Hedera, in a discussion with CoinDesk. “But the more difficult part will be making the project work commercially.”
Arredondo emphasized that merchants would need incentives to adopt the digital euro, suggesting that payment service providers could lower transaction fees to encourage acceptance.
This initiative follows the ECB's recent announcement of 36 banks and payment companies selected to participate in the pilot. The trial will involve collaboration between the ECB, 19 national central banks from the euro area, and participating merchants. Staff from the ECB and national banks will serve as users to assess various payment scenarios, including peer-to-peer transfers, in-store transactions, and mobile payments.
Despite the absence of finalized legislation for the currency, the ECB is advancing with this project as it perceives the rise of private dollar-backed stablecoins, like Tether’s USDT and Circle’s USDC, as a potential threat to Europe’s monetary sovereignty.