The European Central Bank has published a note reviewing banking-industry studies on the investment costs of implementing a digital euro, concluding that banks could materially reduce overall spending by leveraging external synergies and mutualising costs through shared providers and market infrastructures. Based on an extrapolation of adjusted industry estimates that reflects the digital euro’s design, the ECB indicates total euro area banking-sector investment could fall in a €4 billion to €5.77 billion range, or around €1 billion to €1.44 billion per year over four years. The note discusses a PricewaterhouseCoopers study commissioned by the European Credit Sector Agencies that estimated total euro area investment costs of €18 billion from a sample of 19 banks, while not considering offline functionality and market synergies. The ECB’s analysis focuses on “external” synergies such as outsourcing and shared vendor solutions, estimating banking group synergies of around 90% to 98% for Institutional Protection Scheme groups and a weighted average market synergy factor of 30% for non-Institutional Protection Scheme banks in its base scenario. It also adjusts PwC’s cost assumptions to reflect design elements, reducing average costs by around 16% by removing estimated spending for physical card issuing infrastructure, discounting point-of-sale terminal and ATM upgrade assumptions, and excluding a fee-calculation component that would be performed by the Eurosystem. Using a supervised euro area retail banking universe of 1,929 credit institutions, the ECB extrapolates adjusted PwC figures to €5.77 billion in the base scenario and €5.07 billion in a high-synergy scenario, while extrapolations based on other undisclosed banking studies produce €4.0 billion to €4.2 billion; the ECB frames these results against the European Commission’s 2023 impact assessment range of €2.8 billion to €5.4 billion. The note is intended as background for discussions among co-legislators and policymakers on the digital euro legislative proposal and has been presented to the Euro Retail Payments Board. It deliberately excludes internal synergies such as reusing existing bank processes, which it expects to be further refined in stakeholder discussions, and notes that a preliminary estimate of the incremental costs of dedicated offline functionality is being prepared for validation once procurement processes are concluded.
European Central Bank 2025-10-10
European Central Bank estimates digital euro bank investment costs at €4–€5.77 billion after factoring in payment-industry synergies
The European Central Bank (ECB) reviewed studies on the investment costs of a digital euro, suggesting banks could cut spending by leveraging external synergies and mutualising costs. The ECB estimates euro area banking-sector investment could range from €4 billion to €5.77 billion, lower than previous estimates, by adjusting for design elements and excluding certain infrastructure costs. This analysis supports discussions on the digital euro legislative proposal and has been presented to the Euro Retail Payments Board.