Introducing the digital euro could cost European banks between four billion and six billion euros over four years, according to European Central Bank (ECB) Governing Council member Piero Cipollone. Cipollone also stated that the new digital currency is estimated to cost the ECB approximately 1.3 billion euros to establish, with ongoing operational costs of around 300 million euros annually. The ECB is developing the infrastructure for the digital euro, which will be operated through accounts held with the central bank by euro zone residents.
EU citizens outside the euro zone will also have the option to use digital euros, provided their national central bank reaches an agreement with the ECB. The ECB views the digital euro as a way to maintain the relevance of public money in a digital economy, consolidate Europe’s fragmented payments systems, and reduce the influence of non-EU providers to safeguard the bloc’s monetary sovereignty and economic security. The ECB is an independent institution of the European Union that lies at the heart of the Eurosystem and Single Supervisory Mechanism. Its main function is to maintain price stability in the euro area, thereby protecting the purchasing power of the euro.
Cipollone indicated that estimates from banks suggest implementation costs of between four and six billion euros over four years, representing about 3% of their annual IT system maintenance expenditure. Banks will be able to recoup these costs through fees collected from merchants for digital euro services. The smartphone application necessary for digital euro payments will be provided by the banks.
Merchants are expected to benefit from a cap on digital euro payment fees, which will be set lower than current charges by international firms like Mastercard and Visa. The ECB is currently in the process of selecting lenders to participate in the pilot phase of the digital euro, with the official launch anticipated in 2029.
