A response to the digitalisation of payments
As the economy becomes increasingly digital, the use of cash is steadily declining: in France, cash was used in 42% of in-store transactions in 2024, compared with 68% in 2016.
While the digitalisation of payments brings greater simplicity, speed, and convenience, this transformation also poses several challenges for the European payments landscape:
- Increased dependence on non-European players: International card schemes accounted for 69% of all card payments in the euro area in the second half of 2024. This dependence extends to other players, such as "X-Pay” digital wallets. It weakens European sovereignty and contributes to rising merchant fees.
- Persistent fragmentation of the European payments landscape: Most European payment solutions remain limited to a single country or a specific use case. Only five euro area countries still have a genuine domestic card scheme – such as CB in France or Girocard in Germany – and their market share is gradually being eroded by international card schemes. These solutions are not interoperable, preventing seamless payments between users of different solutions.
- A decline in the use of central bank money, of which cash is the only form accessible to the public. Yet, central bank money plays a crucial “anchoring role” in ensuring the stability of the monetary system.
A “digital banknote” to strengthen sovereignty, privacy, and resilience in payments
To address these challenges, the Eurosystem is preparing for the potential launch of a digital euro, which would aim to:
- Ensure European sovereignty and resilience: It would rely exclusively on European technologies, reinforcing the continent’s strategic autonomy. Thanks to its “offline” capability, the digital euro could be used even during network outages.
- Support European integration: As legal tender, the digital euro would be accepted throughout the euro area for all types of payments — peer-to-peer, point of sale, or e-commerce. Its distribution would follow open and harmonised standards across the euro area (defined in the scheme rulebook). These could also be reused by European private solutions, helping them expand across more countries.
- Help reduce merchant fees: By offering a credible European alternative to international schemes, the digital euro would stimulate competition for the benefit of businesses and consumers. Furthermore, EU co-legislators could potentially cap fees and require greater fee transparency.
- Guarantee a high level of privacy: The digital euro would be designed with strong privacy safeguards. Its “offline” functionality would even offer “cash-like” privacy.
A complementary solution to existing means of payment
The digital euro would be based on a public-private partnership:
- It would be issued by the central banks of the euro area but distributed by commercial banks (and other licensed fintechs), which would manage accounts, process transactions, and manage customer relations.
- It could be integrated into existing private payment solutions (cards, mobile apps) or used via a dedicated mobile application developed by the ECB, designed with inclusiveness and accessibility in mind.
The digital euro would enhance citizens’ freedom of choice. It would complement cash and existing means of payment, not replace them.
Public authorities will continue to guarantee the long-term availability and acceptance of cash;
- The European co-legislators are currently preparing a regulation to strengthen the legal tender status of cash within the European Union.
- The Banque de France has announced the construction of a new banknote printing facility in the Puy-de-Dôme region, representing an investment of over €250 million. This project will give France the most modern and efficient public banknote production centre in Europe.
Towards a potential launch from 2029 onwards?
Between 2023 and 2025, the preparation phase enabled deeper design work, experimentation, user research, and the selection of potential providers for the architecture. The ECB also published studies on the project’s potential financial stability implications and on its cost impact for the banking sector.
Following the successful completion of this phase, the ECB’s Governing Council announced on 29 October 2025 the start of a new phase aimed at preparing technically for a potential launch. However, no decision to issue has yet been taken: such a decision can only occur once the legal framework has been finalised by the Council and the European Parliament.
If the digital euro regulation is adopted by the co-legislators in 2026, a “pilot” could begin as early as mid-2027, with a gradual launch starting from 2029.
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