Digital Euro: Is the Ecosystem Ready and Does the Design Work?

Hosted by Ward Hagenaar and Bas van Donselaar, the Digital Euro Round Table at MPE 2026 tackled one of the most consequential questions facing the payments industry today: is the ecosystem actually ready for the Digital Euro, and does the current design make sense?

The session opened with the fundamental question of why the Digital Euro exists at all. Europe's growing reliance on foreign-controlled payment networks has made monetary sovereignty a strategic priority. The Digital Euro is the ECB's response, a state-backed, privacy-by-design payment instrument designed to preserve public money in a digital economy, strengthen European payments sovereignty, and provide cost-free financial inclusion at scale.

But ambition and readiness are two different things.

The roundtable explored four possible rollout scenarios, ranging from an Open Ecosystem driven by broad private-sector adoption to a Regulatory Minimum where compliance costs arrive without meaningful transaction volumes. The difference between these outcomes matters enormously. For merchants, a credible Digital Euro rail could provide real negotiating leverage against card schemes and lower acceptance costs. A poorly adopted mandate, on the other hand, means integration costs with no economic upside.

For PSPs, the stakes are equally high. Whoever owns the wallet layer controls the consumer relationship. For acquirers, the risk is margin compression as processing shifts toward utility-style infrastructure economics.

What emerged clearly from the discussion is that the confirmed ECB policies, universal access, privacy by design, mandatory acceptance thresholds, merchant fee caps, are a foundation, not a final blueprint. Key implementation details remain open, and

the organisations that engage now will have a direct influence on how those details are resolved.

Policy ambition vs. market reality

One of the central tensions highlighted in the workshop is that the Digital Euro is not purely a market-driven innovation. It is a policy-led initiative designed to achieve broader objectives: sovereignty, resilience, financial inclusion, and systemic stability.

This distinction matters. Unlike cards or wallets that succeed based on user demand and commercial incentives, the Digital Euro will likely be pushed forward regardless of immediate adoption. As a result, its success depends on aligning three forces: public policy ambition, private-sector incentives, and consumer behaviour.

The challenge is that these forces are not naturally aligned. Stakeholder perspectives remain fragmented. Central banks are strongly committed to the initiative, while commercial banks remain cautious due to disintermediation risks. PSPs and fintechs see opportunity but require open infrastructure to innovate. Merchants are pragmatic, focusing primarily on cost, adoption, and customer experience at checkout.

This fragmentation reinforces a key point: the final shape of the Digital Euro will be the result of trade-offs, not a perfectly optimised system.

Timeline and the cost of waiting

Another critical insight from the session is timing. The initiative has already moved beyond the conceptual phase. The ECB has taken its go-ahead decision, and the legislative process is well underway, though it is ultimately legislation, not the ECB alone, that will determine the final shape and pace of the rollout. Pilot programmes are expected around 2027, with a potential first issuance from 2029 onwards. The window to engage and influence the outcome is narrower than many organisations realise.

Importantly, participation in early pilots is not cost-neutral. PSPs and other players must invest upfront without immediate financial return. Those involved in pilots and rulebook development will help shape technical standards, access rules, and commercial frameworks.

This creates a strategic asymmetry. Players that engage early can shape the system. Those that wait will have to adapt to it.

The importance of rollout scenarios

The session mapping four possible rollout scenarios and assessing their impact on each player in the payments chain.

The four scenarios are defined by two axes: how market-driven versus ECB-led the rollout is, and how high or low consumer adoption turns out to be.

• ‍Scenario 1 — Open Ecosystem (market-driven, high adoption) is the most favourable outcome for merchants. It creates real negotiating leverage against card schemes, opens lower acceptance costs for high-volume players, and enables B2B settlement use cases that eliminate card rails entirely. For PSPs, wallet competition intensifies — but those that capture the consumer interface gain a lasting advantage. ‍
• Scenario 2 — Public Utility (ECB-led, high adoption) brings mixed outcomes. Merchants face regulated pricing with limited strategic differentiation. PSPs risk processing becoming commoditised, with margin pressure increasing. Acquirers shift toward utility-style infrastructure economics. ‍
• Scenario 3 — Specialized Use (market-driven, low adoption) limits impact to select verticals. For most merchants, PSPs and acquirers, the Digital Euro remains a niche instrument rather than a competitive rail — and card schemes stay dominant. ‍
• Scenario 4 — Regulatory Minimum (ECB-led, low adoption) is the worst outcome for private-sector players. Compliance costs arrive without transaction volume. Merchants, PSPs and acquirers absorb integration obligations with no economic upside.

The key implication cutting across all four scenarios is this: meaningful upside only materialises if the Digital Euro becomes a genuinely competitive payment rail. Central bank rollout alone will not shift competition without broad private-sector uptake, and limited adoption risks confining it to niche public infrastructure rather than a widely used payment method.

Crucially, the difference between these scenarios is not driven by technology, but by incentives. Consumer value propositions, PSP business models, and regulatory calibration will ultimately determine whether the Digital Euro scales or stagnates.

Strategic implications across the ecosystem

For merchants, the opportunity lies in cost leverage and diversification of payment rails. If the Digital Euro reaches scale, it could reduce dependency on card schemes and improve negotiating power. It also introduces new functional possibilities, particularly through conditional payments and programmable settlement flows.

For PSPs, the battleground shifts to the wallet layer. If PSPs can position themselves as the primary interface for Digital Euro usage, they retain control over the customer relationship and can build value-added services on top. If not, there is a real risk that payments become commoditized infrastructure, with value shifting toward wallet providers or BigTech players.

For acquirers, the outlook is structurally challenging. While they are likely to remain embedded in the acceptance flow, large-scale Digital Euro adoption could compress margins by reducing scheme-based economics and pushing pricing toward utility levels.

Across all stakeholders, one theme is consistent: the Digital Euro redistributes value rather than simply creating new value.

What to do now: five no-regret moves

The session closed with a pragmatic framework: five no-regret investments that apply regardless of which scenario materialises.

• First, organisations must build a clear payment cost baseline. Without granular visibility into current costs, it is impossible to assess the impact of fee caps or alternative rails.
• Second, scenario modelling is essential. Running P&L simulations under different adoption and pricing scenarios allows companies to quantify both upside and downside risk.
• Third, infrastructure readiness needs to be assessed. Supporting the Digital Euro may require new capabilities, particularly around programmability, conditional payments, and integration layers.
• Fourth, active engagement in the design process — through pilots, rulebook groups, and industry forums — is a strategic lever, not a compliance exercise.
• Finally, organisations need to define explicit triggers for action. Waiting passively is not a strategy. Whether the trigger is consumer adoption, PSP readiness, or regulatory mandates, clarity on when to move is critical.

Looking ahead

The Digital Euro is not a binary outcome. It is a spectrum of possible futures shaped by policy decisions, market dynamics, and strategic choices made today.

For now, the key takeaway is not whether the Digital Euro will happen, but how it will happen, and who will shape it.