INTERVIEW: What Will Make Europeans Actually Use the Digital Euro?

In this interview with Impact Newswire, Lewis McLellan, Head of Content at the Digital Monetary Institute, and Cal Mitchell, Researcher at Imperial College London’s Centre for Financial Technology, discuss their analysis of what could make or break consumer adoption of the digital euro. Using an agent-based model, they examine how factors such as onboarding time, payment speed, convenience and user experience could determine whether Europeans embrace the digital euro or continue relying on existing payment methods. They also explore the digital euro’s broader role in Europe’s push for financial sovereignty and strategic autonomy.

The European Central Bank is moving the digital euro from the design and preparation stage toward practical testing, but the biggest challenge may be whether consumers find it useful enough to adopt. The ECB says that if EU lawmakers adopt the necessary legislation in 2026, a digital euro could be issued as early as 2029.

The project is part of a broader global push by central banks to develop digital forms of sovereign money. According to a 2025 Bank for International Settlements survey of 93 central banks, 91% were exploring either a retail or wholesale central bank digital currency (CBDC) in 2024. The BIS said preserving the role of central bank money amid declining cash use and the rise of tokenisation was a key motivation, while more than a third of jurisdictions had accelerated CBDC work in response to stablecoins and other cryptoassets.

For Europe, the digital euro is intended to complement rather than replace cash and existing private payment systems. The European Commission’s 2023 proposal described it as a potential additional form of public money that would allow people and businesses to make digital payments across the euro area. The proposal also linked the project to Europe’s desire for a more integrated and resilient payments market.

The question now is whether consumers will actually use it. The digital euro will enter a market where consumers already have access to cards, bank transfers, mobile banking and increasingly fast instant-payment services. This means its success will depend not simply on whether the infrastructure works, but whether consumers see a meaningful advantage over payment methods they already understand and use.

The ECB is already testing the practical aspects of the system. In July 2026, it selected 36 payment service providers to participate in a digital euro pilot after receiving more than 50 applications. The 12-month operational phase is scheduled to begin in the second half of 2027, with testing involving real-world payment scenarios and feedback from users and merchants.

Speed is likely to be an important part of that user experience. The ECB says the digital euro is being designed to support instant payments, including peer-to-peer transactions, while offline functionality could allow payments to take place without an internet connection. The ECB has said offline payments could enable near-instantaneous transfers of digital tokens between devices, with transaction details remaining on the devices rather than being shared with payment service providers or the Eurosystem during or after the transaction.

Privacy is another central issue. The ECB has positioned privacy-preserving technology as a key feature of the digital euro, particularly for offline payments. At the same time, the legislative debate involves questions over what information payment providers and public authorities would be able to access. The European Commission has identified privacy as one of the key design considerations in the development of the digital euro.

Merchant adoption will also matter. The ECB argues that the digital euro could give merchants an additional payment option and reduce their dependence on international card schemes. It has said smaller merchants in some euro-area countries can face substantially higher card-payment costs than larger businesses, creating a potential opening for a lower-cost European payment system.

But availability does not necessarily translate into adoption. A digital euro could be secure, interoperable and technically sophisticated yet struggle to gain traction if registration is cumbersome, payments are slow or merchants see little reason to accept it. This makes seemingly mundane questions such as how long onboarding takes, how quickly money reaches another person and how easily a customer can pay at a shop potentially as important to the project’s success as its monetary and technological architecture.

Against this backdrop, Official Monetary and Financial Institutions Forum’s (OMFIF) Lewis McLellan, Head of Content at the Digital Monetary Institute, and Cal Mitchell, Researcher at Imperial College London’s Centre for Financial Technology, have examined these questions using an agent-based model. In this interview with Faustine Ngila, they discuss what their analysis reveals about the design choices that could make or break consumer adoption of the digital euro.

Here is the interview:

1. Your analysis suggests that onboarding friction could make or break digital euro adoption. Why is the sign-up process so important, and what would happen if the ECB gets this wrong?

A fast and easy sign-up process is important for the success of any digital service – the digital euro is no exception. This is especially true when good alternatives exist, such as commercial bank deposits and modern card networks.

My model suggests that if the ECB makes it too hard to sign up, people just won’t. They will continue using the systems they’re accustomed to.

2. You recommend that digital euro onboarding should take no more than 20 minutes. Is that realistic given the identity, AML and security checks required for a central bank digital currency?

There are many design decisions that will affect digital euro sign-up times, which makes it hard to predict how long it will take. That’s why I included a chart showing signup attrition at different onboarding durations.

I believe it’s possible for signup to take less than 20 minutes if that metric is prioritised, which is exactly why I’m advocating for it. However, this may require streamlining/standardization of AML checks, and possibly a universal EU ID system, which would be politically contentious.

When the digital euro is accessed via bank apps, sign-up will naturally be much quicker since the KYC checks have already been conducted, but this is only one medium and a standalone app is an important part of the ECB’s strategy.

3. Your modelling suggests peer-to-peer payments should take 60 seconds or less. How important is speed in convincing consumers to use the digital euro instead of existing payment apps and bank transfers?

My model shows that once consumers have signed up for the digital euro, speed to complete a transaction is everything.

History shows that faster, more convenient payment methods win, sometimes at the expense of reliability or safety. For example, we went from coins to paper money that can be redeemed for coins. Then we went from paper money to digital deposits that can be redeemed for paper money. The history of payments is a relentless march towards convenience.

The digital euro must make people’s lives easier, or it will be irrelevant.

4. The digital euro will enter a payments market already dominated by cards, mobile wallets and instant bank transfers. What problem does it solve for the average European consumer that existing payment methods do not?

The average EU consumer is already well served by modern digital payment methods, but there is room for the digital euro to marginally improve things. Peer-to-peer payments could be faster, fees could be lower, and digital payments could continue working during internet outages.

These are all worthy goals, but the purpose of the digital euro isn’t to marginally improve the payments experience. It’s a politically driven initiative to maintain sovereignty of the European financial system.

The digital euro makes sense when considered alongside other areas where Europe is trying other establish strategic autonomy, such as defense, cloud computing / digital infrastructure, semiconductors, and even space technologies like GPS systems. The challenge the ECB faces is to translate its political motivation into reasons for individuals to use the instrument.

5. The ECB has placed significant emphasis on privacy in its digital euro plans. Can the digital euro realistically offer users greater privacy while still meeting Europe’s anti-money laundering and financial crime requirements?

The ECB has proposed some interesting schemes that claim to enhance privacy. However, I haven’t reviewed those claims thoroughly enough to offer an informed comment.

6. Banks have raised concerns that the digital euro could accelerate deposits leaving commercial banks. How should the ECB balance widespread adoption of the digital euro with the need to protect the stability and funding model of Europe’s banking system?

Asset flight is a problem that EU policymakers are aware of. They have taken steps to ensure that consumers, merchants, and investors will all be prevented or disincentivized from fleeing commercial bank deposits en masse.

On the consumer side, the digital euro is expected to have a holding limit of €3000, although this has not yet been confirmed in legislation. Any reasonably small cap will prevent large-scale flight to the digital euro as a safe asset.

On the merchant side, merchants will not be able to hold digital euros for long – their holdings will automatically be converted to commercial bank money. 

The digital euro will not pay any interest. This likely rules it out as an attractive instrument for investors.

These steps, taken together, will almost certainly limit the digital euro to its intended purpose as a retail payment method.

7. What is the single biggest design or policy decision that could determine whether the digital euro becomes a mainstream payment method or remains a niche product?

I’m not sure there is one remaining policy decision that will determine adoption. Many of the big structural choices have already been made.

At this point, I think execution quality is the most important remaining factor. Because EU consumers are already well served by modern payment instruments, the digital euro will need to compete on merit. The ECB should give the digital euro a recognisable brand identity and focus on delivering an excellent user experience.

I question whether developing the world’s first major central bank digital currency is the most efficient way for the EU to maintain payment system sovereignty. However, that decision has already been made, and I commend the ECB on the work they’ve done. They have certainly done their homework.

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