A Strategic Perspective
The European Central Bank is moving from theory to execution on the Digital Euro, a central bank retail digital currency designed as a euro-backed, risk-free digital means of payment for everyone in the euro area, not to replace cash, but to complement it and strengthen Europe’s monetary sovereignty. On their side, banks are expected to act as intermediaries, manage onboarding and wallets, integrate the Digital Euro into their services, and build new value-added offerings. The project is now in preparation. If EU lawmakers adopt the regulation in the course of 2026, the digital euro could be issued during 2029. A pilot exercise and initial transactions could take place earlier, potentially starting as soon as mid-2027.
For a broader perspective on what a digital euro could mean for banks and citizens, Sopra Steria’s article The Digital Euro: Reinventing Money, Redefining Banking explores the implications.
What the Digital Euro is and what it isn’t
The Digital Euro is envisioned as a central bank digital currency (CBDC): a digital form of cash issued by the ECB and accessible to the public in the euro area. This is meant to complement, not replace existing payment solutions and physical cash, while differing in key ways from existing forms of money:
- Unlike commercial book money, the Digital Euro would be risk-free, backed directly by the ECB.
- Unlike cryptocurrencies and most stablecoins, it would be regulated, non-speculative, and legally recognized as legal tender.
As already stated, the goal is not to replace cash, but to provide a complementary digital payment solution for the eurozone reliable, accessible, and sovereign.
The Digital Euro is also not intended to disrupt the role of commercial banks. It will not be programmable in a way that restricts how users can spend their money. The European authorities’ intention is to enhance choice and resilience in the European payment ecosystem not to disintermediate the financial sector.
However, banks remain cautious about the Digital Euro, perceiving its potential applications as insufficiently differentiated from current systems. This tension highlights the trade-off between Europe’s sovereignty objectives and banks’ commercial considerations, particularly given the significant costs associated with its rollout.
ECB’s Objectives: Sovereignty, Innovation, Resilience
The ECB is pursuing the Digital Euro not for novelty’s sake, but as a response to structural shifts in payments and monetary policy. Its aims are clear: the Digital Euro is a tool to strengthen Europe’s strategic autonomy in payments. Today, there is a heavy reliance on non-European card schemes for in-store payments. This dependency poses a risk to monetary sovereignty, especially in a world where digital payments are increasingly dominated by global tech firms.
The Digital Euro is not just a response to today’s vulnerabilities, but aims to:
- Strengthen monetary sovereignty by reducing dependence on foreign-dominated payment networks and providing a public digital payment option under European governance.
- Foster innovation and competition in digital financial services by enabling new services and business models through open infrastructure.
- Ensure payment resilience, especially in times of crisis or infrastructure disruption, by offering a fallback.
The ECB views the Digital Euro as a strategic asset in an increasingly digital, geopolitical economy.
The Role of Banks: More Than Technical Intermediaries
Banks are not being sidelined they are expected to serve as intermediaries in distributing the Digital Euro. Their potential responsibilities include:
- Handling onboarding, identity verification and anti-money laundering (AML) compliance
- Providing wallets and customer interfaces for consumers and merchants
- Offering customer support and guidance to ensure a smooth user experience and build trust in the Digital Euro
- Integrating the Digital Euro into existing banking platforms and services
Beyond infrastructure, banks will ultimately be the face of the Digital Euro for end users. While the initiative presents opportunities to build new revenue streams, its concrete use cases remain debated. Many banks remain cautious, awaiting clarity from upcoming rulebooks and assessing deployment costs. However, early positioning could still enable banks to co-create innovation rather than merely react to it for example by exploring value-added services such as embedding the Digital Euro into loyalty programs, funding solutions, smart contracts, or broader business ecosystems.
Timeline and Project Status
So where do we stand on the project? The ECB completed its two-year investigation phase in 2023 and entered the preparation phase in November 2023, which runs until early 2026.
Key milestones include:
- 2023: End of the investigation phase
- Nov 2023 – late 2025: Preparation phase led by the ECB
- 2024–2025: Development of the Digital Euro rulebook defining interoperability, privacy and user experience standards
- 2024–2025: Vendor selection for infrastructure and wallet solutions
- Key providers have already been chosen, marking the transition from concept to implementation
- Extensive testing and stakeholder engagement, including banks, merchants and consumers
A final decision will be made after the EU legislative process concludes, likely in early 2026. The earliest possible launch is expected in 2026.
The project is no longer theoretical. We are firmly in the design and decision-making stage.
Why Banks Must Act Now
The Digital Euro is more than a regulatory requirement; it represents a strategic inflection point. Banks that wait risk being reduced to technical processors in a value chain they once led. Inaction is therefore not an option particularly as the Digital Euro is expected to take the form of a regulation applying uniformly across Europe.
To act strategically, banks should:
- Monitor regulatory developments and participate in ECB consultations
- Conduct internal readiness assessments for integration with core banking systems, APIs and compliance frameworks
- Identify customer segments and use cases to define their role in the ecosystem
- Align digital and payments strategies with future CBDC models
- Explore new revenue streams and business models, including value-added digital identity services
Banks are uniquely positioned to build trust in the Digital Euro if they act early.
Those who prepare early will help shape the rules of engagement. Those who wait may simply have to follow them.
Aligning digital and payments strategies with future CBDC models is further explored in Sopra Steria’s free white paper Stablecoins, Digital Euro: Which currency for tomorrow’s finance?
Final Thoughts
The introduction of a Digital Euro is not just a technical evolution, but a potential monetary and strategic transformation for Europe’s financial system. It offers banks an opportunity to reaffirm their role as trusted intermediaries, though practical use cases remain debated and deployment costs are significant.
As the ECB progresses, banks are encouraged to engage early monitoring regulation, exploring pilots, and assessing viable business models.
The Digital Euro is coming, but its adoption will depend on clear use cases, cost considerations, and careful strategic planning.
If you’re evaluating CBDC opportunities, explore our offer here and see how, together, we can turn vision into value.
FAQ:
What is the point of a digital euro?
The Digital Euro aims to strengthen Europe’s strategic autonomy in payments, reduce dependence on non-European payment networks, and ensure resilience in times of crisis. It provides a reliable, accessible, sovereign public digital payment option under European governance.
Is the Digital Euro a cryptocurrency?
The Digital Euro is a central bank digital currency (CBDC), regulated and directly backed by the European Central Bank. It is legally recognized as euro and is not a speculative crypto asset.
How to use the Digital Euro?
Citizens and merchants would access and use the Digital Euro through banks, via wallets and payment interfaces integrated into existing banking services. It is designed to function like digital cash for everyday payments.
Is the Digital Euro replacing cash?
No. Its objective is to complement physical cash and existing payment solutions by offering a digital public alternative for the eurozone.
Who controls the Digital Euro?
The Digital Euro would be issued and backed by the European Central Bank, with commercial banks acting as intermediaries for onboarding, wallets and customer support.
Can you invest in Digital Euros?
No. The Digital Euro is regulated, non-speculative central bank money intended for payments, not investment.
Is the Digital Euro safe?
Yes. It is described as risk-free because it is directly backed by the ECB and designed to be stable, regulated and trusted across the euro area.