The European Central Bank is taking another step towards the era of the digital euro, with Cyprus, like other Eurozone countries, actively participating in the pilot phase of the new European payment system.
The ECB has announced the payment service providers that will take part in the beta testing of the digital euro. Bank of Cyprus and JCC Payment Systems have been selected from Cyprus.
The two Cypriot organizations will cooperate with the European Central Bank and the Central Bank of Cyprus, in the context of a major European test, which will examine in practice how the new digital means of payment works. The pilot phase is expected to start in the second half of 2027 and will last one year. The aim is to evaluate the technical infrastructure, the issuance and management processes, but also the user experience in a controlled environment.
A total of dozens of providers from the eurozone, including major European banks, payment institutions and financial services technology companies, are involved in the process. The list includes organizations from countries such as Germany, Italy, France, Greece, Spain, Portugal, the Netherlands, and Ireland.
Among the international participants are large banking groups and payment companies, such as Deutsche Bank, UniCredit, Nexi, Worldline, Revolut, Stripe and Adyen, which shows that the digital euro test will involve both the traditional banking system and the fast-growing digital payments sector.
The participation of the Bank of Cyprus and the JCC allows the Cypriot market to participate from the early stages in shaping the infrastructure and procedures that will be required for a possible future use of the digital euro. The Central Bank of Cyprus welcomed the selection of the two Cypriot providers and underlined that it will work closely with them and with the European Central Bank in the preparation of the pilot phase.
The digital euro is a Eurosystem project to create a public digital payment instrument to complement cash and existing electronic payments. The pilot process does not mean an automatic launch of the digital euro, as the final decision on its adoption will be taken at a later stage, after the completion of the necessary legislative and technical procedures.
During the pilot, an ECB staff member, for example, could use the test digital euro to send money to a colleague, pay at the ECB canteen using their phone, or buy a product online at participating merchants, while the Eurosystem would monitor the process and collect and provide feedback on user experience.
This will support the assessment of the system's resilience, scalability, and usability and enhance collaboration between payment service providers (PSPs), merchants, and central banks.
The ECB says that the pilot programme will also help the Eurosystem to improve the design and user experience of the digital euro, as well as to assess communication and branding approaches. Updates will be shared transparently.
