CBDC | The European Central Bank to Cut Digital Euro Rollout Costs by Re-Using Existing Payment Frameworks and Standards

The European Central Bank (ECB) is working to reduce costs associated with the digital euro rollout by leveraging existing payment frameworks and standards. Agreements have been reached with European standard-setting bodies to reuse standards such as CPACE, Nexo, and Berlin Group. CPACE supports contactless ‘tap-to-pay’ payments via NFC. Nexo standards connect merchants’ systems with payment service providers, supporting POS transactions and cash-machine operations. Berlin Group standards enable payments via aliases (e.g., mobile numbers) and balance checks across devices, facilitating digital euro transactions in merchant apps. This approach aims to mitigate adoption barriers by allowing banks and payment providers to build on current infrastructure, enabling geographic expansion and diversifying use cases without developing entirely new systems. However, the initiative will not eliminate broader financial burdens, including software upgrades, compliance changes, and terminal modifications. Earlier estimates suggest eurozone banks, merchants, and payment providers could incur costs of €4–6 billion over four years. The digital euro, first proposed in 2021, aims to complement cash and electronic payments, with a potential launch later this decade pending legislative approval.