European Central Bank calls for merchants to participate in digital euro pilot

The European Central Bank (ECB) on Tuesday called on e-commerce and mobile commerce merchants in the euro zone to join a digital euro pilot as it prepares a retail central bank digital currency (CBDC) for possible issuance in 2029.

The pilot will test the technology, operational processes and user experience of a beta version of the currency, which will resemble the digital euro, but will not be legal tender.

The ECB’s call for merchants is about more than just technical testing. A digital euro will need enough places to spend it if consumers are to use it, making merchant acceptance a commercial question as much as a policy one.

“Many people think the digital euro’s success will depend on how governments and the public sector explain its usefulness,” Isadora Arredondo, vice president of global policy at Hedera, told CoinDesk via LinkedIn. “But the more difficult part will be making the project work commercially.”

Arredondo said merchants would need incentives to join in sufficient numbers and to ensure consumers do not encounter barriers when paying. One option, she said, could be for payment service providers to lower the fees merchants pay to accept digital-euro payments.

The call for merchants comes weeks after the bank selected 36 banks and payment firms to participate in the testing phase. The 12-month pilot is scheduled to begin in the second half of 2027, with the ECB targeting possible issuance in 2029, subject to legislation and a separate Governing Council decision.

The trial will involve the ECB, 19 euro-area national central banks and selected merchants. ECB and national central bank staff will act as users, testing online and offline transfers between individuals, in-store payments, e-commerce purchases and mobile-commerce payments.

While legislation enabling the currency has not been finalized, the ECB is pressing ahead with the project because it views the adoption of private dollar-backed stablecoins, such as Tether’s USDT and Circle Internet’s USDC, as a threat to Europe’s monetary autonomy.