Brussels. The future of Europe's independence from US payment systems is set to begin in a canteen in Frankfurt am Main. From summer 2027, employees of the European Central Bank (ECB) will be able to pay for their lunch with the digital euro – if everything goes according to plan.
The pilot project is scheduled to run for twelve months, and it should go beyond this one canteen: the ECB has selected 36 payment service providers approved in the euro zone for other places where payments can be made with the digital euro in the future, and more than 50 applied. 19 national banks are also taking part.
Payments between private individuals and in commerce are being tested. Participants include central bank employees and selected traders; Deutsche Bank, Unicredit and the payment service providers Sumup and Adyen are among the test partners.
The legislative process at EU level is currently ongoing, and it can only begin once the law is available. The signs are good: this week the latest round of negotiations between Parliament and the Council of the EU took place in Strasbourg.
“There is currently a bit of a tangle on some of the technical issues,” says European Parliament member Markus Ferber (CSU), but: “Almost everyone involved believes in finding solutions.”
An agreement is still planned under the Irish Council Presidency, i.e. before the end of the year. “I think that’s realistic too,” says Ferber. If the legislation for the digital euro is actually in place at the end of 2026, the euro zone's “digital cash” will be introduced for everyone in 2029.
Sanctions against ICC fuel debate
Experts and politicians in Brussels now agree that time is of the essence - and this is mainly due to the unpredictability of US President Donald Trump. Digital payments are currently made via US providers such as Visa and Paypal.
If it were the case that these companies refused Europeans access to their services following political pressure, the European market would effectively be insolvent. "Can we guarantee that our citizens will then be able to pay something? No," a person familiar with the project told Handelsblatt.
The trigger was the sanctions that the USA imposed in October against the International Criminal Court (ICC) in The Hague. As a result, several judges and investigators of the Court have lost their access to digital payment services. Their credit cards have been withdrawn and they can no longer pay online.
The only thing they have left is cash. Now the US government wants to extend these sanctions to all court employees - around 900 people will then be cut off from modern life in Europe.
If there is a blockade by the USA, those affected would, for example, no longer be able to book flights, take out a streaming subscription or buy insurance. The concern of many EU politicians and experts is that the USA could expand these sanctions at any time against other people they dislike.
For example, against EU governments because of their support for Ukraine. Or against EU officials who are investigating US tech companies, as the Trump administration has already threatened to do.
Dispute over costs and fees
The digital euro is intended to enable all EU citizens to pay online and in stores regardless of the US payment system.
But who pays for the project? Politicians and officials in Brussels report massive lobbying from the banking sector, which fears significantly higher costs than the ECB has stated. “At the moment the central sticking point in the negotiations is the issue of costs and fees,” says Representative Ferber.
"It is essentially agreed that in the end we want to arrive at a cost-based model with an appropriate margin. The costs for retailers should remain below those incurred with comparable payment systems."
However, since there is a lack of data for the correct calibration, negotiations on how to get to the final system were difficult, says Ferber. Many details are still pending.
A suitable new terminal for retailers also still needs to be developed – by European companies. Retailers would like to cap the fees for the digital euro so that it would be cheaper than most other payment methods. According to a Bundesbank analysis, cash and the Girocard have so far been cheap for retailers. Visa, Mastercard and other credit cards cost more.
The biggest public concern remains privacy - something the ECB wants to address once the law is passed at EU level. “Nobody wants to get rid of the cash,” says an ECB official. On the contrary: the EU legislative package provides for an obligation to accept cash. According to Bundesbank data, 55 percent of transactions were cashless, with people paying in cash in 45 percent.
