ECB calls for merchants to join digital euro pilot ahead of 2029 target

The European Central Bank (ECB) has called on e-commerce and mobile commerce merchants in the eurozone to participate in a digital euro pilot, marking a significant step toward issuing a retail central bank digital currency (CBDC) by 2029.

Large-scale testing program

The 12-month pilot is scheduled to begin in the second half of 2027, after the ECB selected 36 banks and payment firms to participate in the testing phase. A beta version of the currency will be used in the trial, resembling the digital euro but without legal tender status.

Staff from the ECB and the 19 euro-area national central banks will act as users, testing online and offline transfers between individuals, in-store payments, e-commerce purchases, and mobile commerce payments.

Strategic motivation: Countering USD stablecoins

Although legislation enabling the digital currency has not been finalized, the ECB is pressing ahead with the project because it views the adoption of private USD-pegged stablecoins — such as Tether’s USDT and Circle’s USDC — as a threat to Europe’s monetary sovereignty.

ECB President Christine Lagarde stated that the digital euro is necessary to safeguard Europe’s monetary sovereignty and reduce reliance on USD-pegged stablecoins. This is a clear message that the ECB does not want Europe dependent on payment infrastructure controlled by private US companies.

Challenges from the merchant side

Isadora Arredondo, vice president of global policy at Hedera, noted: “Many people think the digital euro’s success will depend on how governments and the public sector explain its usefulness. 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 could be for payment service providers to lower the fees merchants pay to accept digital euro payments.

This is the same challenge other new payment systems have faced: how to create sufficient network effects when both buyers and sellers need to see real value.

Lessons for Vietnam and Japan

The ECB’s pilot provides important lessons for central banks in Asia:

Vietnam

• CBDC research: The State Bank of Vietnam has been researching CBDC since 2021, but has no concrete testing plans yet
• Stablecoin adoption: USD stablecoins are widely used in cross-border payments and DeFi in Vietnam
• Lessons from ECB: Need to create incentives for merchants rather than relying solely on legal regulations

Japan

• Digital yen: The Bank of Japan (BOJ) completed technical testing of the digital yen in March 2026
• Private sector involvement: Major banks like Mitsubishi UFJ and Sumitomo Mitsui are developing digital payment solutions
• Stablecoin framework: Japan has had a regulatory framework for stablecoins since 2023, allowing both CBDC and private stablecoins to coexist

Impact on global payment infrastructure

If successful, the digital euro will create the first retail CBDC model in a major economy, potentially becoming a blueprint for other central banks. However, success depends on:

1. Merchant acceptance: Enough merchants accepting payments
2. User experience: As simple and convenient as current card payments
3. Fee structure: Fees lower than or equal to credit cards
4. Privacy: Protecting user privacy
5. Interoperability: Compatibility with existing payment systems

Perspective from Fujigo

For fintech businesses in Vietnam and Japan, CBDC development in Europe creates opportunities:

• Cross-border payments: CBDC could enable more efficient cross-border payments between Europe and Asia
• Technology transfer: Technologies and experience from the ECB pilot could be applied in Asian markets
• Regulatory learning: The ECB’s regulatory framework and pilot model are valuable reference materials

Fujigo recommends that businesses closely monitor the development of the digital euro and prepare infrastructure to integrate when CBDC becomes a reality.

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Source: European Central Bank calls for merchants to participate in digital euro pilot — CoinDesk, September 15, 2026