Digital euro is near: EU fast-tracks the CBDC project

On December 19, 2025, the Council of the European Union agreed on its position regarding the digital euro, supporting the simultaneous launch of online and offline functionality. The decision removes a key uncertainty and moves the EU’s central bank digital currency (CBDC) project into a phase of practical implementation — from architecture to limits and timelines.

Digital euro as a response to changes in the EU payment architecture

Against the backdrop of a declining share of cash in everyday payments and the growing role of private payment infrastructure, the EU is accelerating work on the digital euro as a form of public money in the digital environment. Formally, cash remains a universal means of payment; however, in practice, an increasing number of transactions are processed through banks, card networks, and fintech platforms, concentrating control over payments in the hands of a limited number of private players.

Within this logic, the digital euro is not positioned as a replacement for bank accounts or as an alternative to cryptocurrencies. Its core function is to complement cash and provide citizens and businesses with access to central bank money in digital form, independent of the business models of specific payment providers. This is why offline functionality became a key issue from the very beginning of the discussion: without it, the digital euro would not be able to serve as a полноценний public payment instrument.

Why did the EU choose an online + offline model?

Support for the simultaneous launch of the digital euro in both online and offline modes became a compromise between two approaches that had long competed with each other. On the one hand, there was full integration into the existing payment ecosystem via banks and payment services. On the other, the creation of a digital equivalent of cash with a higher level of autonomy and privacy.

In online mode, the digital euro envisages a distribution model through financial intermediaries that interact with users but do not control the funds themselves. This allows the new currency to be integrated into existing infrastructure without radically reshaping the market. Offline mode, in turn, is designed for direct device-to-device transactions without immediate access to the central system, minimizing data exchange and bringing the level of privacy closer to that of cash.

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For the European Central Bank (ECB), such a model, on the one hand, complicates technical implementation and requires clearly defined constraints — in particular, limits on offline storage and spending. On the other hand, this architecture is precisely what prevents the digital euro from becoming just another electronic payment instrument and enables it to function as a universal means of settlement across different economic and technical conditions.

In practical terms, the decision on a simultaneous launch removes the main uncertainty surrounding the project: the EU is no longer choosing between convenience and autonomy but is instead attempting to embed both properties into the core model of the digital euro.

Where the project stands now: Technical readiness instead of concepts

The ECB completed its research phase in 2023, and in October 2025 it concluded the preparatory stage and moved into the phase of technical readiness. This does not concern the issuance of the digital euro itself, but rather the creation of conditions under which a launch would be possible without systemic risks. At this stage, work is focused on the ledger architecture, offline payment mechanisms, holding limits, and the role of financial intermediaries.

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At the same time, regulators are concentrating on risks: potential deposit outflows from banks, impacts on financial stability, and the boundaries of privacy. It is in this context that the EU Council supported the introduction of limits on the amount of digital euro held in online wallets. Specific parameters will be set by the ECB, but the overall upper threshold will be reviewed at the political level at least once every two years. This is intended to prevent the digital euro from being used as a savings instrument.

What comes next: Legislation, timelines, and limits of expectations

Further progress on the project depends on the legislative process. The European Commission has already proposed a regulation, but the final decision must be taken by the European Parliament and the Council of the EU. According to current estimates, approval could be completed in 2026.

If the decision is positive, pilot tests and initial transactions may take place from mid-2027, while a potential launch of the digital euro for widespread use is being considered on a 2029 horizon. Financially, the project already has clear benchmarks: the ECB estimates development costs up to the first issuance at approximately €1.3 billion, with subsequent operating costs of around €320 million per year, while the adaptation of banking systems could cost €4–5.8 billion.

In a broader context, the digital euro is part of the Single Currency Package — a set of measures aimed at strengthening the role of the euro as both a domestic and global currency. Support for a simultaneous online and offline launch indicates a strategic approach to design, but timelines remain cautious. The digital euro has ceased to be a hypothesis, yet it has not become a tool for everyday payment scenarios in the near term.

What this means for users

For users, the digital euro — if launched — will become another way to make payments in euros alongside cash and bank transfers. Unlike stablecoins issued by private companies and backed by reserves and proprietary circulation rules, the digital euro will be a form of central bank money and will operate within a unified EU regulatory framework.

Another key distinction is the planned ability to use it both online and offline, reducing dependence on a stable internet connection and on the operation of specific payment services.

Separately, the EU and the ECB are embedding parameters designed to protect financial stability and define usage rules: limits on holdings of digital euro in online wallets, enhanced privacy requirements for offline payments, and standardized conditions for access via financial intermediaries. Ultimately, this is not about replacing existing instruments, but about introducing an additional, EU-level regulated payment option with clearly defined rules of use and consumer protection.