What is the digital euro, and why does the EU need it?
What is the digital euro, how would it work, would it replace cash and how could it make the EU less dependent on non-EU countries?
The digital euro would be a new way for you to pay with euros electronically, in shops and online and to make payments to other people. It would exist alongside physical cash, filling a gap in the EU's digital economy.
This European payment option would also reduce our dependence on payment systems controlled outside Europe, increasing the EU's digital and monetary sovereignty.
The digital euro is still in the preparation phase. The European Parliament and the EU countries (the Council) are currently negotiating the legal framework that would make this new form of money possible.
Read on to find out more about the digital euro, how would it work, what would it mean for you and for the European economy, and when it might be launched.
What is the digital euro?
The digital euro would be a new electronic form of cash, issued by the European Central Bank (ECB). It would exist alongside physical cash (banknotes and coins) and could be used by anyone wanting to make payments - both online and offline - in the euro area.
The digital euro could also be made available in EU countries that do not yet use the euro, under certain conditions.
The digital euro would be public money, issued by the European Central Bank. Today, you can only use central bank money directly in the form of physical cash: banknotes and coins.
By contrast, the money you normally see on your bank account is commercial bank money. This is what you use when you pay by card or make a bank transfer. When you withdraw cash from your bank account, you are converting commercial bank money into central-bank money. When you deposit cash, the opposite happens.
How would the digital euro differ from cash and bank money?
- The digital euro would be a form of cash that is digital not physical.
- The digital euro would be public, not commercial bank money.
- The digital euro would be issued by the ECB and would always have the same value as cash: one digital euro would equal one euro.
Would the digital euro replace cash or other existing payment methods?
No. The digital euro would not replace cash or force people to pay digitally. It would give people an additional payment option alongside cash, cards, banking apps and other existing methods. Users would remain completely free to choose how they want to pay.
Euro area countries would be obliged by law to keep physical cash available. You would remain free to use euro banknotes and coins, and EU rules would continue to protect access to and acceptance of cash. As a general rule, businesses would not be allowed to refuse cash, with limited exceptions, for example some vending machines or other unmanned payment points.
EU countries would need to monitor financial inclusion and make sure that people could still access physical cash. This includes those people who rely on cash most, such as older people and people without easy access to banking services.
How would paying with the digital euro be different from paying by card?
When you pay by card or banking app today, you use money held in an account with a commercial bank, and the payment may pass through a private payment network such as Visa or Mastercard. With the digital euro, you would pay using public money issued by the ECB.
For users, the experience could look quite similar: the digital euro could be accessed through an app or wallet and used to pay in shops, online or to other people. The main difference would be what happens behind the payment.
Is the digital euro a crypto currency? Can you invest in it?
No. Unlike crypto currencies, the value of the digital euro would not fluctuate. One digital euro would always be worth exactly one euro, just like a one-euro coin or one euro in a bank account. The digital euro would be designed for payments, not as an investment, and would not pay interest.
How would the digital euro work in everyday life?
The digital euro would be another way for you to pay in a shop, buy something online or send money to another person, with a level of privacy equivalent to paying with physical cash. The exact limit on how many euros any one person could hold at one time has yet to be decided.
The digital euro in practice
You would keep your digital euros in a dedicated account with your bank, or in another bank chosen for this purpose, or a with another payment service provider. These entities would have to be authorised to provide this service.
All payment service providers, including banks, e-money providers, post offices, and regulated crypto-asset providers, would be able to distribute the digital euro across the EU.
You would be able to use the digital euro through an app or digital wallet, for example on a smartphone. You could also make certain payments offline, without an internet connection. The precise details of these practical aspects are still being worked out and would be tested before the digital euro’s launch.
Under the proposed rules, most businesses in the euro area would have to accept digital euro payments, although some exceptions would apply. For example, some small businesses that do not accept other digital payments could be exempt.
In practice, you could use digital euros to pay in a shop, buy something online or send money to another person.
Will the digital euro protect my privacy and personal data?
Privacy is intended to be one of the digital euro’s key features. The ECB would not be able to directly link individual payments to specific users, and safeguards would be built in to verify transactions without exposing personal data. Only the personal data needed to process payments would be processed.
As the digital euro would be managed inside the EU by a public institution (the ECB) rather than by private providers with a commercial interest in monetising data, it would offer greater privacy than current card payment methods. EU data protection rules would apply in full.
For digital euro offline payments, only the payer and the recipient would know the transaction details, offering a level of privacy very similar to cash.
Will there be payment limits?
There would be a limit on how many digital euros one person can hold at a time, to prevent large shifts of money out of bank accounts that could destabilise banks. The exact limit has not yet been decided.
Is the digital euro a good idea?
The digital euro would fill a gap in the Europe's digital economy by enabling people to use cash online. Costing no more than current payment systems, the digital euro would also reduce the EU’s dependence on payment systems controlled outside Europe, giving us strategic autonomy from non-EU countries.
A digital way to use cash for payments both online and offline
You cannot currently use cash (ECB money in physical form) online. The digital euro would fill this gap. You would not need an internet connection, and private individuals' offline payments would be free of charge.
Lower fees for businesses
Basic digital euro services for private individuals would be free of charge. This would include opening and using a digital euro account, keeping digital euros in a wallet, and making basic payments.
Businesses already pay fees when customers use cards. Under the proposed rules, service fees for them would be capped and should be lower than the current fees. The level of these fees would be decided inside the EU, in contrast to the current situation.
A European alternative to non-EU payment services
Most euro area countries currently depend heavily on international card payment systems, in particular the US-based Visa and Mastercard networks. This means that all non-cash payment flows and associated personal data and fees are handled outside the EU.
This situation has already resulted in cases of EU citizens being denied access to their EU bank accounts from outside the EU. In August 2025 for example, the United States sanctioned French citizen Nicolas Guillou, a judge at the International Criminal Court, over his role in issuing an arrest warrant for Benjamin Netanyahu, effectively cutting him and his family off from major US-linked payment services such as Visa and Mastercard. As these networks are deeply embedded in Europe’s payment infrastructure, this also restricted his access to many payment services in Europe as well.
A digital euro, issued and handled inside the EU, would help protect EU citizens from situations of this kind.
It would give people across the euro area access to a European payment option and reduce the EU’s dependence on payment systems controlled outside Europe.
When is the digital euro coming?
The digital euro is still very much in the preparation phase. Before it can be introduced, the European Parliament and the EU countries need to agree on and adopt the legislation.
The ECB meanwhile needs to finalise preparations on the technical side. It has said that the digital euro could be up and running by 2029, depending on when the legislation is adopted.
Adopting the digital euro regulation
The European Parliament and the EU countries are currently negotiating the final details of the legislation on the digital euro.
Parliament wants the digital euro to be secure, protect users’ privacy and be free for basic use by private individuals. MEPs want clear limits on how many digital euros one person can hold, They also want thorough testing before the launch and clear information for the public.
The EU institutions aim to reach an agreement on the legislation and on the timing for the digital euro's possible introduction by the end of 2026. Even after the legislation is adopted, the ECB would still have to decide when to issue the digital euro.
Europe does not have to choose between the digital euro and successful private payment solutions. We need both to work together (…) existing standards and infrastructure should be reused wherever possible. This will allow European payment solutions to connect to a commonly accepted infrastructure and become interoperable across borders.
The European Central Bank's technical preparations
Before any launch, the ECB would need to complete its work on the digital euro platform, run pilot tests in real-life conditions and finalise the digital euro rulebook setting out exactly how it would work.
Once the preparation phase is complete, banks, payment providers and businesses would have two years to prepare before the digital euro becomes widely available in EU member states.
The ECB has said that the digital euro could be up and running by 2029, depending on when the legislation is adopted.
