In a presentation by Executive Board member Piero Cipollone, the European Central Bank set out the Eurosystem’s payments strategy for the digital era, centred on two new ways of supplying central bank money: a digital euro for retail payments and tokenised central bank money for wholesale transactions. The update frames these initiatives as the ECB’s response to the digitalisation of payments, the emergence of distributed ledger technology and a greater focus on reducing dependencies and strengthening resilience, with the aim of supporting an integrated European payments market while preserving monetary policy transmission, financial stability and the smooth operation of payment systems. For retail payments, the ECB described the digital euro as a digital form of cash that would be available online and offline across the euro area and distributed through EU-licensed payment service providers, with banks at the core of distribution. The design features highlighted include holding limits, no remuneration, funding and defunding features, no holdings for businesses and compensation for banks distributing the product. The ECB also presented the digital euro as a public payments infrastructure with open standards that could support private-sector innovation and give domestic and regional solutions pan-European reach. On timing, the current phase, running from November 2025, focuses on technical readiness, market engagement and support for the legislative process. A 12-month pilot is planned to start in the second half of 2027, and the ECB said it aims to be ready for a potential first issuance during 2029. Any decision to issue remains conditional on the adoption of the digital euro Regulation by the EU co-legislators. For wholesale markets, the ECB said tokenised central bank money is intended to act as the risk-free settlement anchor alongside private settlement assets, support tokenised deposits and mitigate systemic risks associated with private digital settlement arrangements. Pontes is designed to connect distributed ledger technology platforms with TARGET Services so that DLT-based transactions can settle in central bank money, with launch planned for September 2026 and further enhancements to follow. Appia is positioned as a longer-term public-private initiative on analysis, standardisation and design for a tokenised ecosystem, with a blueprint expected in 2028. On cross-border payments, the ECB highlighted work to link TIPS with fast payment systems outside Europe, including with India, Switzerland and Brazil, participation in the Nexus network and involvement in BIS-led Project Agorá, alongside use of TIPS’ multicurrency functionality for end-to-end instant settlement in central bank money.
European Central Bank2026-06-25
European Central Bank outlines digital euro pilot for second half of 2027 and Pontes launch in September 2026
In a presentation by Piero Cipollone, the European Central Bank outlined its payments strategy around a retail digital euro, tokenised central bank money for wholesale use and cross-border payment links. The ECB said a digital euro pilot will run for 12 months from the second half of 2027 and that it aims to be ready for a possible first issuance in 2029, subject to EU legislation. It also said Pontes, which links DLT platforms to TARGET Services for settlement in central bank money, is due to launch in September 2026.