The digital euro explained

What would the digital euro be?

The digital euro is the EU’s project to introduce a digital form of cash. It would be a central bank digital currency,  issued by the European Central Bank (ECB), and available to everyone in the euro area

The digital euro would complement, not replace, banknotes and coins. It would give people an additional choice when paying, while preserving cash as a means of payment.

Public versus private money

To understand how the digital euro would work, it is important to distinguish between central bank money and private money.

Central bank money is public money in that it is issued by a central bank and, as such, represents a ‘public good’. For now, it is available to the public mainly in the form of banknotes and coins used for cash payments.

Private money, is created by commercial banks. It includes money held in bank accounts and used for everyday payments, such as card payments or online transfers. In daily life, people regularly convert private money into public money (for example, by withdrawing cash) and vice versa.

Key features of the digital euro

Why do we need a digital euro?

Introducing the digital euro is necessary to ensure that the euro continues to cater for people’s changing payment preferences and to strengthen the euro area’s strategic autonomy.

Adapting to digital payments

Although cash remains the most frequently used payment method in Europe, people in the euro area increasingly rely on cards, mobile apps, and online payments.

Currently, central bank money exists only in physical form (cash) and cannot be used directly for everyday digital payments. A digital euro would bridge this gap  by giving everyone the option to pay digitally with public money, backed by the ECB and available alongside cash.

Purchase transactions for goods and services in the euro area

• Study on the payment attitudes of consumers in the euro area (European Central Bank)

Strengthening Europe’s open strategic autonomy

Digital payments in the euro area are fragmented. Many countries rely heavily on international card schemes for card payments (13 out of 20). As a result, digital euro payments are often processed through non-EU infrastructures with related data stored in a non-EU country, and fees are set according to commercial conditions defined outside the EU.

The digital euro would offer a pan-European payment solution, available throughout the euro area, under European governance and operated by European providers.It would strengthen the resilience of the euro area’s payment system and give people a European digital payment option, alongside existing private solutions.

How would the digital euro work?

The digital euro would be designed to be easy to use and familiar, being similar to other digital payment solutions.

People would be able to access the digital euro through a dedicated digital euro account or through a digital wallet, provided by their bank or another intermediary. It will be free of charge to set up and use a basic digital euro wallet.

With a digital euro account and their digital wallet, depending on the case, people would be able to:

• pay in shops, both online and in person
• make person-to-person payments, such as sending money to friends or family
• use the digital euro online and offline, including without an internet connection

To safeguard financial stability, there would be limits on the amount of digital euros individuals can hold in their wallet at any given time. These limits would ensure that the digital euro is used mainly as a means of payment, rather than as a store of value, and would help prevent risks to financial stability.

How is the digital euro different from cards or mobile payment apps?

The digital euro would not replace cards or mobile payment apps, but would complement them by offering an additional way to pay digitally.

Today, many digital payments in the euro area rely on payment systems operated outside the EU. When these systems are used, payments made in euros may be processed through non-EU infrastructures before reaching the seller. This means that significant payment flows and related fees, as well as personal transaction data, are handled by non-European providers.

With the digital euro, payments would be processed within the EU. The digital euro would be 'public' money issued by the ECB, which issues and safeguards the euro. It would allow people to pay digitally using central bank money across the euro area, offering a single European payment solution available in all euro area countries.

Debit and credit cards and mobile payment apps, by contrast, rely on private bank money issued by commercial banks and operate through private payment schemes, often involving fees.

How is the digital euro different from crypto-assets?

The digital euro would not be a crypto-asset.

The digital euro would be backed by the ECB, the institution that issues and safeguards the euro, just like cash. It would always be worth its face value: one digital euro would always be worth exactly the same as a €1 coin.

Crypto-assets (e.g. cryptocurrency), by contrast, are not backed or managed by a central authority. Their value can fluctuate significantly, which makes them risky and unstable. There is also no guarantee that crypto-assets can be exchanged for cash or used as a means of payment when needed.

The legislative process to introduce the digital euro

In June 2023, the Commission put forward the single currency package. The package includes a proposal setting out the legal framework for the possible introduction of the digital euro, as well as a complementary proposal on its possible distribution by payment service providers incorporated in member states whose currency is not the euro.

On 19 December 2025, the Council adopted its positions on the key proposals to strengthen the euro currency by introducing a digital euro.Now that these positions have been agreed, the Council can enter into negotiations with the European Parliament.

Once the proposal to establish the legal framework has been adopted by the European Parliament and Council, it will ultimately be for the ECB to decide whether to issue the digital euro. The ECB has recently indicated that the digital euro could be up and running by 2029.

A proposal on access to cash

The single currency package also includes a proposal to strengthen the legal tender status of cash. This means that euros in physical cash must generally be available and accepted as payment for goods and services and to discharge debts, subject to well-defined and properly monitored exceptions.

On 19 December 2025, the Council agreed its position, aiming to clarify these rules, including how they interact with the digital euro, in order to ensure consistency between the two forms of central bank money. The proposal’s main provisions aim to:

• safeguard the acceptance of cash as a payment method throughout the euro area
• guarantee that people have access to cash and are free to choose their preferred payment method

• Single currency: Council agrees position on the digital euro and on strengthening the role of cash (press release, 19 December 2025)