ECB Seeks Merchants to Help Test Digital Euro Payments in 2027

The European Central Bank is asking online and mobile merchants in the euro area to take part in an upcoming test of its planned digital currency. The bank announced on Tuesday that e-commerce and mobile-commerce businesses can apply to join the pilot through October 27.

What merchants will be asked to do

Selected businesses will enable beta digital euro payments within their online checkout processes, allowing the ECB to study how the currency might work in real remote commerce settings. 

The pilot is designed to evaluate user experience, technical performance, and the operational steps needed to use the currency as a form of payment ahead of a possible issuance in 2029.

The version of the digital euro used in the pilot will be almost similar to the one highlighted in the draft EU legislation, but it will not have legal tender status during the test period. 

A group of payment providers was chosen earlier this year. In July, the ECB selected 36 payment service providers out of over 50 applicants. Firms like Revolut, Stripe, Deutsche Bank and UniCredit were among the chosen. These providers will support user access, merchant acceptance, or both, during the pilot phase.

The 12-month trial is scheduled to start in the second half of 2027 and will also include the ECB itself along with the 19 national central banks in the EU. Central bank staff would act as users during testing, trying out online and offline transfers.

Merchant buy-in seen as key to success

Getting merchants on board was one of the difficult parts of the project. Isadora Arredondo, vice president of global policy at Hedera, said commercial adoption may be harder to achieve than public understanding of the digital euro. 

"Many people think the digital euro's success will depend on how governments and the public sector explain its usefulness," she said. "But the more difficult part will be making the project work commercially."

Arredondo also added that incentives would need to be implemented so that merchants can participate in large numbers, adding that lowering the fees payment service providers charge merchants could be another way to encourage adoption.

Broader push linked to stablecoin concerns

The digital euro project comes as European policymakers continue to share concerns on the dominance of dollar-backed stablecoins in global markets. ECB officials, including Executive Board member Isabel Schnabel, have pointed out that the global stablecoin market has grown to $300 billion, with Tether's USDT and Circle's USDC accounting for almost 90% of that total. 

Schnabel said dollar stablecoins reinforce the international dominance of the U.S. dollar while euro-denominated alternatives are comparatively small.

However, euro-denominated stablecoins compliant with the EU's Markets in Crypto-Assets framework have grown recently, though from a small base. 

Data covering eight MiCA-compliant euro stablecoins showed that combined market value rose 128% over the year through late June, climbing from $296 million to $674 million. Trading volume for those tokens also increased 43% over the same period. 

Even with that growth, the euro tokens still make up less than 1% of the overall global stablecoin market.

ECB President Christine Lagarde has warned repeatedly that privately issued stablecoins could pose risks to financial stability and interfere with how monetary policy works in the region. She also added that Europe should stop replicating the dollar-stablecoin model.

It is worth noting that the incoming digital euro will offer users a “maximum level of privacy,” according to information shared by the central bank.

The digital euro's progress still depends on the legislation that has not yet been finalized. The European Parliament's Economic and Monetary Affairs Committee advanced its position on the digital euro proposal in June, but further proceedings are still on hold.