The EU has advanced plans for a digital euro after member states agreed on a common negotiating position on legislation that would allow a central bank digital currency and reinforce the legal status of cash.
EU Backs Digital Euro Framework as Council Pushes to Protect Cash
19 December 2025 - 17:06 CET
By Matt Neill
The move clears the way for formal negotiations with the European Parliament in 2026 and marks the most concrete political progress yet on a project the European Central Bank has said could be operational by 2029, subject to legislative approval.
Strategic payments rationale
The digital euro is also being positioned as a response to Europe’s reliance on non-European payment infrastructure.
ECB officials and national governments have repeatedly argued that a public digital currency would reduce dependence on US card networks such as Visa and Mastercard for cross-border payments within the bloc.
The digital euro would be usable across the euro area via a smartphone app or physical payment card, acting as a publicly backed alternative alongside private payment systems rather than replacing them.
ECB President Christine Lagarde said this week that the central bank’s technical work on the project is complete, leaving the next steps squarely in the hands of EU lawmakers.
Officials have also highlighted resilience benefits, arguing that a digital euro could help maintain payments during cyberattacks or outages affecting commercial banking infrastructure.
Privacy concerns shape final text
The Council’s position reflects months of negotiation aimed at addressing political sensitivity around privacy and financial surveillance.
The final text explicitly strengthens data segregation rules, making clear that central banks would not be able to access or re-identify users’ transaction data during processing.
Offline functionality, which allows payments without an internet connection, is also framed as a core privacy-preserving feature rather than a technical add-on.
