Digital euro
The digital euro is a project of the European Central Bank, launched in July 2021, to explore the possible introduction of a central bank digital currency. The aim is to develop a fast and secure electronic payment instrument that would complement the euro for individuals and businesses in its existing form as cash and in bank accounts, and would be issued by the European System of Central Banks of the Eurozone. The ECB has stated that the digital euro would not be based on blockchain or other distributed ledger technologies.
, the Governing Council of the European Central Bank has decided to move to the next phase of the digital euro project, following the completion of the preparation phase launched by the Eurosystem in November 2023. The ECB stated that, assuming EU legislation is adopted in 2026, the Eurosystem aims to be ready for a potential first issuance of a digital euro by 2029, with testing beginning from mid-2027.
History
As cash usage declined and private digital payment providers became more prominent, the European Central Bank began an investigation into the possible creation of a digital euro. According to the European Central Bank, a digital euro would ensure that citizens and businesses retain access to central bank money in digital form and complement existing electronic payment services, addressing changes in payment behaviour and the lack of a pan-European retail digital payment option.2020
On 2 October 2020, the ECB published a report outlining the introduction of a digital euro from the perspective of the Eurosystem.2021
After preliminary planning and presenting public consultation results in early 2021, the ECB launched the digital euro project in July 2021 to prepare for its potential introduction. No technical barriers were identified during the preliminary planning. The research, which is scheduled to run until autumn 2023, aims to shed light on the distribution to merchants and citizens, the impact on markets and the necessary European legislation. No preliminary decision has therefore been taken on the introduction of the digital euro.2022
In September 2022, the ECB announces a collaboration with five companies to develop potential user interfaces for the digital euro.Burkhard Balz, a member of the Bundesbank's Executive Board, sees the digital euro not least as a means of strengthening European sovereignty in payments. In his view, the digital euro could be designed to support programmable payments in a highly automated environment.
The first "Progress on the investigation phase of a digital euro" report was published by the ECB in September 2022.
Speaking at the conference "Towards a legislative framework enabling a digital euro for citizens and businesses" held in Brussels in early November 2022, Christine Lagarde, President of the European Central Bank, reiterated that the digital euro is not a stand-alone project limited to the area of payments. Rather, it is a cross-policy and truly European initiative that has the potential to have an impact on society as a whole.
In December 2022, the ECB published the second progress report on the investigation phase.
2023
In January 2023, the ECB invited experts in the field of payments/finance to express their interest in contributing to the development of a set of rules for the digital euro.At the end of May 2023, the ECB published the results of a market research and prototyping project. The market research had shown that there was a sufficiently large pool of European vendors capable of developing digital euro solutions. It had also shown that different types of architectural and technological design options were available to develop a technical solution for a digital euro. The prototyping project involved the integration of five user interfaces developed by different vendors for each use case and a settlement system designed and developed by the Eurosystem. Different design options were tested to determine whether they could be technically implemented and integrated into the Eurosystem's settlement system. The tests showed that it would be possible to integrate a digital euro smoothly into the existing payment landscape, while leaving room for the market to use innovative features and technologies in the dissemination of a digital euro. The results also confirmed that, in principle, a digital euro could function both online and offline using different technical concepts. The question remains whether an offline solution that meets the Eurosystem's requirements and achieves the necessary scale can be implemented in the short to medium term using existing technology.
On 18 October 2023 the ECB announced that a decision had been made to move forward with preparation phase.
2024
In December 2024, the ECB released its second progress report on the digital euro project, detailing advancements made between May and October 2024. During this period, the Rulebook Development Group completed a review of the initial draft of the rulebook, addressing approximately 2,500 comments. Subsequently, seven new RDG workstreams were initiated to focus on critical areas such as minimum user experience standards, risk management, and implementation specifications. These efforts aim to refine the digital euro's framework, ensuring it meets the Eurosystem's objectives and aligns with legislative developments within the European Union.2025
On 31 January 2025, ECB President Christine Lagarde and European Commission President Ursula von der Leyen published an op-ed in which they cited the digital euro project as part of an effort to keep Europe at the forefront of digital payment technologies.In August 2025, with the new U.S. administration actively supporting the development of dollar-linked stablecoins and 99% of official currency-backed stablecoins being tied to the U.S. dollar, Lagarde urged European lawmakers to "seize the 'euro moment'" and rapidly put in place a legislative framework to "pave the way for the potential introduction of a digital euro," to address the risk posed by stablecoins.
On 30 October 2025, the ECB announced that the preparation phase begun in November 2023 had concluded and that the Governing Council had decided to move to the next phase of the digital euro project. The ECB said the new phase would focus on technical readiness; assuming EU legislation is adopted in 2026, a pilot exercise could begin in 2027 and the Eurosystem would aim to be ready for a potential first issuance during 2029.
2026
The European Parliament is set to vote on the digital euro in the first semester of 2026.While the negotiation started in January, a group of 70 economists and academic experts, including Thomas Piketty and Paul de Grauwe, and former central bank governor Miguel Ordóñez, published an open letter to the European Parliament. In the letter, reported by the Financial Times and around thirty European news outlets, the signatories argued that a robust public digital euro is the "only defence" against Europe's deepening dependence on US-based payment systems and the associated geopolitical risks. The economists warned policymakers against "shortsighted" lobbying by the banking industry intended to scale down the project. They advocated for a digital euro designed as a public good that is universally accessible, privacy-preserving, and functional offline to ensure monetary sovereignty and resilience. This intervention stands in contrast to the position of the Parliament's lead rapporteur, Fernando Navarrete, who has advocated for a significantly scaled-down version of the project.
Design and proposed features
ECB project documents describe the digital euro as a retail payment instrument intended to complement cash and existing electronic payments, with payment services provided by supervised intermediaries under a common scheme rulebook.The ECB has described the preparation work as covering areas including privacy protections, offline functionality and a rulebook for participating payment service providers.
European Commission proposals for a digital euro regulation describe objectives including maintaining availability of central bank money for the public and ensuring a high level of privacy in digital payments, while supporting accessibility and financial inclusion.
Off-line transactions
ECB project documents describe an offline digital euro functionality allowing close proximity payments to be made without an internet connection to support situations where connectivity is unavailable.According to the European Commission’s proposal for a digital euro regulation, offline digital euro payments would provide a cash-like level of privacy, with transaction data remaining locally between payer and payee, while excluding full anonymity.
Privacy and data protection
The digital euro is designed with a privacy-by-design approach, to ensure a high level of data protection while complying with existing EU anti-money laundering and counter-terrorist-financing rules.For offline payments, the ECB has stated that transaction details would be known only to the payer and the payee, offering a cash-like degree of privacy.
For online payments, the ECB has indicated that the Eurosystem would not be able to directly identify users, with payment data pseudonymised and encrypted. Supervised intermediaries would continue to carry out AML/CFT checks, similar to current electronic payment systems.
Views on the possible introduction of a digital euro
As of June 2024, the Governing Council was slated to make a decision by the end of 2025 on whether to proceed to the next stage of planning for a digital euro.The Verbraucherzentrale Bundesverband sees the digital euro as a public good and thus an opportunity to make digital payments more consumer-oriented.
The German Informatics Society sees the introduction of a digital euro and the simultaneous decline of cash as a threat to informational self-determination and privacy; there is a danger of the "Gläserner Mensch".