A digital banknote for the general public

At a time when cash is being used less and less for transactions, the digital euro will allow some of its unique characteristics to be preserved in the digital space:

  • Its potential legal tender status will make it usable anywhere in the euro area and in any context - in shops, in e-commerce or in peer-to-peer transactions.
  • Its offline mechanism will provide cash-like privacy and enhanced resilience.
  • Its design will be conducive to digital financial inclusion - in particular, it will be accessible to people who are unbanked or do not have a smartphone.
  • Basic services will be free for individuals.

The issuance of the digital euro will also make it possible to preserve the place of central bank money in our monetary system, which plays an "anchor role" and contributes to trust in our single currency.

Moreover, the digital euro will offer additional functionalities compared to cash: it will be usable for remote payments (in e-commerce, in peer-to-peer) or for conditional payments (e.g. recurring payments).

More freedom of choice for individuals

The digital euro will complement, but not replace, cash and other means of payment. It will give individuals more freedom of choice, without any obligation to use it. 

Public stakeholders are strongly committed to maintaining the availability of cash:

  • With its cash strategy, the Eurosystem is committed to ensuring that cash remains widely accessible and accepted, both as a means of payment and as a store of value. Accordingly, the Eurosystem is considering the introduction of a new banknote series – for which European citizens have been invited to express their preference in the summer of 2023.
  • The European Commission has published a "single currency package" which, in addition to its proposal on the digital euro, includes a proposal to strengthen the legal tender status of cash within the EU.
  • The Banque de France announced the construction of a new banknote printing factory in the Puy-de-Dôme region, at a cost of over €250 million, which will give France the most modern, efficient and environmentally friendly public banknote production centre in Europe.

Smooth integration into the payments and financial ecosystem

The digital euro will be distributed by financial intermediaries (commercial banks, payment institutions and e-money institutions). The role of the Eurosystem will be limited to what is strictly necessary. In particular, the Eurosystem will never be able to see the personal data of digital euro end-users or to link payment information to individuals.

The digital euro will be a "platform for innovation" and will enhance sovereignty, competition and integration in the European payments sector. The distribution of the digital euro will be governed by a set of commercial and technical rules (payment scheme) that will ensure the interoperability of the different payment solutions and a uniform user experience. In particular, these rules will allow the emergence of open and harmonised acceptance standards in the euro area, which can be reused by private actors. In this way, the digital euro will constitute a "platform for innovation": it will facilitate the development of new private payment solutions, under European governance, that can be used anywhere in the euro area and in any context.

To safeguard financial stability, digital euro accounts will be subject to a holding limit. Amounts received in excess of this holding limit may be automatically transferred to a commercial bank money account (waterfall mechanism).

Next steps

Between October 2021 and October 2023, the Eurosystem conducted an investigation phase on the digital euro. This phase allowed the Eurosystem to (i) define the characteristics of a potential digital euro, by interacting with market players, (ii) gain technical knowledge, by building a prototype and conducting a market research, and (iii) better understand users' expectations, by conducting qualitative studies (focus groups #1 and #2).

Since November 2023, the Eurosystem has entered a preparation phase. Initially, this phase will allow to (i) finalise certain analyses (e.g. scheme rulebook), (ii) experiment functionalities, and (iii) prepare the development of the technical architecture supporting the digital euro.

Meanwhile, in June 2023, the European Commission published a proposal for a regulation defining the ways in which the digital euro could be used. This text is currently being discussed by the Council and the European Parliament, thus opening up a democratic debate on the digital euro. The Eurosystem will adapt the architecture of the digital euro in line with the decisions taken by the co-legislators.

At this stage, the decision to issue a digital euro has not yet been taken. This decision can only be taken by the Eurosystem once the legal framework has been defined. If the Governing Council decides to issue a digital euro, it could be launched gradually from 2027 or 2028 onward.