36 Providers Selected for Digital Euro Trial as Europe Moves to Harmonize Asset Tokenization Standards
Key Facts
The European Central Bank has selected 36 payment service providers from across the euro area to participate in a digital euro trial, after receiving more than 50 applications, paving the way to test the proposed currency in real-world transactions. The bank said the trial will begin in the second half of 2027 and run for 12 months, as a test of infrastructure, functionality and user experience rather than a currency launch. Participants will include the selected payment providers, merchants, ECB staff and 19 national central banks. Everyday uses will include payments at cafes, alongside other use cases within the scope of the trial. The pilot version will be functionally and technically close to the proposed digital euro, but will not have legal tender status.
In parallel with the trial, the ECB is seeking to develop European digital payment infrastructure that works alongside cash and private solutions. Piero Cipollone said the digital euro would be digital money issued by the central bank for everyday use, complementing cash and available for online and offline payments in stores, e-commerce and between individuals. He added that private European payment initiatives still face barriers to scaling across the continent, and that cross-border transactions account for only 5% of the market. The bank will not provide services directly to customers; regulated banks and payment providers will handle distribution, customer relationship management and the development of complementary services. The Eurosystem will bear the cost of building and operating its core infrastructure, with no planned scheme or processing fees on transactions, while the detailed arrangements remain under legislative discussion.
In a parallel track, EU institutions are working to establish standards for tokenizing financial assets and facilitating their transfer between digital platforms and traditional infrastructure. The standards aim to ensure interoperability in distributed ledger technology markets, including the settlement and custody of financial instruments across different digital infrastructures, as well as between them and existing infrastructure. Industry bodies will lead the group, while the European Commission, the European Securities and Markets Authority and the ECB will participate as permanent observers. The work forms part of efforts to reduce market fragmentation and develop common rules for dealing with tokenized assets. The mandate aims to produce initial versions of standards linked to the Appia roadmap by early 2028.
These efforts build on operational steps launched by the Eurosystem to settle tokenized asset transactions in central bank money. Cipollone said the Pontes system, launched on 21 September, connects distributed ledger technology-based market platforms to Eurosystem services. The connection enables tokenized asset transactions to be settled in central bank money, linking digital infrastructure with official settlement instruments. The bank expects implementation of the system to be completed by mid-2028, with plans to provide a service that operates around the clock. The bank also aims to offer greater programmability, flexibility and multi-currency capabilities once implementation is complete.
The proposed standards are part of amendments related to the European pilot regime for assets based on distributed ledger technology. Further improvements were proposed in December 2025 as part of the market integration and supervision package. The document states that the work delegated under the amendments can be carried out if those amendments are adopted into law. The development of the standards is therefore tied to the evolution of the legal framework, alongside the technical work led by the participating group members. Adoption of the amendments remains a condition for carrying out the related delegated work.
The digital euro’s issuance remains contingent on a legislative decision that has yet to be resolved. The ECB aims to be ready for a possible issuance in 2029, assuming the digital euro regulation is adopted in 2026. The bank said it will not decide whether to issue the currency before the regulation is adopted, making the planned trial a testing phase ahead of any final decision. In developing Appia, the public consultation received 127 responses, and 90% of participants submitted at least one proposal to contribute to the work. The market contact group also includes 61 entities selected from more than 100 applicants to provide input and ongoing guidance for the roadmap.
On sanctions enforcement, the European Commission announced the launch of a “Crypto Sanctions Taskforce” to counter attempts to evade financial sanctions through crypto assets. The initiative focuses on the use of cryptocurrencies to circumvent restrictions imposed on Russia, according to a Commission statement. This places digital assets within European sanctions enforcement efforts, alongside work to establish rules for digital financial infrastructure. The initiatives therefore include an enforcement component targeting evasion attempts, alongside regulatory and technical tracks to develop digital settlement and payments. The Commission did not specify a timeframe for the taskforce’s work.