The introduction of a digital euro could cost European banks between €4 billion and €6 billion over four years, according to estimates presented by European Central Bank Executive Board member Piero Cipollone. The figures offer the clearest indication yet of the financial impact the project could have on the banking sector, as EU lawmakers continue to debate the legislation required to launch the currency.
Speaking to an Italian parliamentary committee on banks, Cipollone said the estimate is based on indications provided by financial institutions themselves and would amount to roughly 3 percent of what banks spend annually on IT system maintenance. The comments come as the ECB moves into the preparatory phase of the digital euro project and begins selecting banks for participation in a pilot ahead of a possible 2029 launch.
The ECB’s own costs are also significant. Cipollone said the central bank expects setup costs of around €1.3 billion. Once operational, ongoing expenses are projected at approximately €300 million per year.
The digital euro would be a retail central bank digital currency, allowing euro area residents to hold accounts directly with the ECB. The infrastructure is being developed with private contractors, while banks would provide the front-end services, including smartphone applications for payments.
Banks and Merchants Could Offset Costs
Cipollone argued that banks will be able to recoup their investment through fees charged to merchants for digital euro payment services. Crucially, banks will not have to deduct from merchant fees the costs normally paid to private payments networks, because the ECB will not charge for access to its infrastructure.
Merchants may also benefit from the new system. According to Cipollone, fees on digital euro payments will be capped and set below the levels currently charged by international card schemes such as Mastercard and Visa. That pricing structure is designed to create incentives for acceptance while addressing concerns about Europe’s reliance on non-EU payment providers.
The broader policy objective is strategic. The ECB has repeatedly framed the digital euro as a tool to safeguard monetary sovereignty, strengthen Europe’s fragmented payments market and ensure that public money remains relevant in an increasingly digital economy.
The project remains contingent on EU legislation. The European Commission’s proposal is still under negotiation between the European Parliament and the Council. Without a legal framework, the ECB cannot issue the currency.
By quantifying expected costs for both banks and the central bank, the latest estimates sharpen the political debate. Supporters argue the investment is modest relative to annual IT spending and could reduce long-term dependence on global card networks. Critics, particularly in parts of the banking sector, question the commercial case and potential impact on deposits.
With pilot participants now being selected and technical groundwork advancing, the coming months will test whether political momentum matches institutional preparedness. For Europe’s payments industry, the financial calculus is becoming increasingly concrete.