European Central Bank technical note estimates digital euro investment costs for euro area banks at EUR 4 to 5.8 billion

The European Central Bank published a Eurosystem technical analysis for co-legislators that reassesses banking sector estimates of the investment costs of implementing a digital euro. After adjusting for existing synergies and correcting assumptions used in earlier studies, the Eurosystem view puts total investment costs for banks at EUR 4 billion to EUR 5.8 billion over four years, or EUR 1 billion to EUR 1.44 billion per year. The assessment draws on cost studies received from banks and banking associations, a European payments IT landscape review conducted with external support, and Eurosystem and national central bank expertise using supervisory reporting data. It identifies three main sources of upward bias in some published estimates: underestimation of synergies and cost mutualisation through centralised and specialised service providers, incorrect assumptions about the digital euro design or legal requirements, and extrapolations based on the number of credit institution licences rather than implementation at consolidated bank or banking group level. Scenario analysis yields EUR 3.5 billion to EUR 3.7 billion in a high-synergies case, EUR 4.0 billion to EUR 4.2 billion in the base case, and EUR 6.1 billion to EUR 6.5 billion in a low-synergies case, compared with the European Commission impact assessment range of EUR 2.8 billion to EUR 5.4 billion and a referenced PwC estimate of EUR 18 billion. The note is not adopted or endorsed by the ECB’s decision-making bodies and flags that banks’ internal IT costs remain uncertain because key design decisions depend on the final Regulation.