CBDC | The European Central Bank to Cut Digital Euro Rollout Costs by Re-Using Existing Payment Frameworks and Standards

The European Central Bank (ECB) is working to lower the cost of introducing a digital uEro by promoting the use of common technical standards, even as banks warn they could face billions of euros in implementation expenses.

The ECB said it has reached agreements with European standard-setting bodies to reuse existing payment frameworks, aiming to simplify how financial institutions integrate the planned central bank digital currency and create a uniform user experience across the euro area.

The standards include:

• CPACE standards, developed by ECPC, support contactless “tap‑to‑pay” payments using near‑field communication between a payment device and a payment terminal;

• Nexo standards specifications connect merchants’ systems with the back-end systems of payment service providers and acquirers. They are used, for example, to support payment acceptance and cash-machine transactions;

• Berlin Group standards allow payments to be made using an alias (such as a mobile phone number) and support balance checks and reconciliation across mobile devices and payment acceptance in areas like digital euro transactions initiated in merchant apps on smartphones.

The move is designed to reduce one of the key barriers to adoption by allowing banks and payment providers to build on current infrastructure and enable the European payment schemes to expand geographically and diversify use cases rather than developing entirely new systems.

For example, a national card scheme could expand its operations to point-of-sale (POS) environments outside its home market without requiring technical POS terminal upgrades.

However, the central bank acknowledged that the initiative would only mitigate, not eliminate, the broader financial burden associated with the project. Banks are still expected to invest heavily in

• upgrading core systems,
• compliance processes and
• payment infrastructure.

Earlier estimates cited by the ECB indicate that euro zone

• banks,
• merchants, and
• payment service providers

could incur costs of between four to six billion euros over four years to prepare for a potential rollout.

The standards push comes as the ECB prepares the technical groundwork ahead of a possible pilot phase with officials seeking early coordination among payment providers, merchants and regulators.

Despite efforts to streamline implementation, industry groups have cautioned that the overall cost remains significant, with additional expenses tied to

• software upgrades,
• certification requirements and
• changes to payment terminals and ATMs.

The digital Euro, first proposed in 2021, is intended to complement cash and existing electronic payments, with a potential launch later this decade pending legislative approval.

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