The European Central Bank published a note assessing recent banking-industry studies on the investment costs of implementing a digital euro and concludes that shared solutions, outsourcing and broader cost mutualisation could materially lower the overall cost for the euro area banking sector. On that basis, it estimates the banking sector’s own cost projections could fall in a EUR 4 billion to EUR 5.77 billion range in total, or EUR 1 billion to EUR 1.44 billion per year over four years, broadly aligning with the European Commission’s 2023 impact assessment range of EUR 2.8 billion to EUR 5.4 billion for euro area credit institutions. The analysis starts from industry work including a PwC study commissioned by the European Credit Sector Agencies that extrapolated EUR 18 billion from 19 banks in nine markets, and then adjusts for assumed design features and external synergies. The ECB applies scenario-based synergy factors, including banking group synergies proxied by Institutional Protection Scheme membership (around 90-98% in its base case) and a weighted average market synergy factor of 30% (with examples such as 30% in Germany, 35% in Italy and 30% in France), alongside corrections to PwC design assumptions that reduce average costs by about 16% (e.g. removing physical card build costs, discounting POS and ATM replacement assumptions and excluding a fee-calculation component performed by the Eurosystem). Using a euro area universe of 1,929 retail credit institutions mapped to PwC-style asset-size clusters, the note extrapolates adjusted PwC estimates to EUR 5.77 billion in the base scenario and EUR 5.07 billion in a high-synergy case, while extrapolations based on other (undisclosed) banking studies are estimated at EUR 4.0 billion to EUR 4.2 billion. The ECB frames the note as background requested by co-legislators for discussions on the digital euro legislative proposal and notes it has been presented in the Euro Retail Payments Board. It also flags that the analysis focuses on external synergies and does not yet quantify “internal” synergies such as reuse of existing bank processes, which it expects to refine through stakeholder discussions; costs for dedicated offline functionality are not included and a preliminary estimate is being prepared pending procurement outcomes.
European Central Bank2025-10-10
European Central Bank reviews digital euro cost studies and places euro area bank investment at EUR 4 billion to EUR 5.77 billion once synergies are included
The European Central Bank (ECB) published a note evaluating the investment costs of implementing a digital euro, suggesting that shared solutions and outsourcing could significantly reduce costs for the euro area banking sector. The ECB estimates these costs could range from EUR 4 billion to EUR 5.77 billion, aligning with the European Commission's 2023 impact assessment. The analysis, based on industry studies and adjusted for design features and synergies, serves as background for discussions on the digital euro legislative proposal.