The European Central Bank (ECB) is preparing the ground for a digital euro, even though the law that would allow the digital money to be introduced has not yet been passed.
On October 30, the ECB published two contracts it has signed with network service providers who will connect banks and payment firms to the digital euro platform.
The ECB chose Nexi Payments with Deutsche Telekom Business Solutions, and a group consisting of Telefónica and Indra. The first contract started on September 28 and covers the pilot phase, while the ECB said that both will be ready to go live, "as of 2029," should the digital euro be introduced that year.
The ECB also promises that the digital euro will offer "a high level of security and privacy." But privacy, in particular, is something that many observers doubt the ECB's digital currency will be able to deliver.
The bank itself says that offline payments will offer "a cash-like level of privacy," while online transactions are a different story: "PSPs would be able to identify users for the purpose of compliance with anti-money laundering rules," the ECB said.
True, the ECB adds, "the Eurosystem would not be able to directly link digital euro transactions to specific individuals." But this is little consolation, since the banks will be able to do that.
The ECB's president, Christine Lagarde, told members of the European Parliament (MEPs) in 2023 that "not anonymity, but privacy is protected" by the digital euro. She dismissed as a "conspiracy theory" the fear that the new currency will give the state control over people's purchases, and said that the data should be made available to the authorities "upon request."
Cash – the only real competitor the ECB's digital currency will have, at least initially – leaves no record of purchases with anyone.
The ECB has repeatedly said that it is targeting "a potential first issuance of the digital euro during 2029, assuming the digital euro Regulation is adopted in 2026." A 12-month pilot is planned for the second half of 2027.
The ECB's announcement of the contracts with the two groups of companies was preceded by the Council's statement in December 2025 that the digital euro is a matter of "strategic autonomy" for Europe, while the ECB says it will "complement cash, not replace it."
The ECB has not yet announced the exact amount of digital euro that people will be allowed to hold, and the bank says that this is still to be decided.
In December 2025, the EU Council said that the limits "will be set by the ECB, but must respect an overall ceiling agreed by the Council which will be reviewed at least every two years."
The ECB said that it had tested hypothetical limits of up to €3,000 per person, but that no figure had been fixed.
Under the roadmap published in September 2025, the ECB would propose the cap only 12 to 6 months before the digital euro is launched.
Meanwhile, the legal basis for the ECB to proceed with its plans is still missing. The European Parliament (EP) committee in charge of the matter voted in June 2026 to open negotiations on the proposal, which was confirmed in a plenary vote in July. The file is now awaiting the EP's first-reading position.
The ECB, however, says it "will only decide whether to issue a digital euro once the Regulation has been adopted."
This did not stop the bank from selecting 36 payment firms to participate in the digital euro pilot, starting with the selection of merchants who will test the digital money, and developing an app.
The ECB's Lagarde is known to be impatient with the slow pace of the legislative process in the EU. In October 2025, she complained that democracy is "too much of a drag at a time when speed is really of the essence."
While the ECB now says that the digital euro would complement cash, and not replace it, that promise is only as good as the next policy decision that may concern cash.
