The European Union has taken a major step toward launching a digital version of its currency, as the EU Council has backed a plan for a digital euro that can work both online and offline. This decision signals a shift from earlier proposals that focused only on offline use and brings Europe closer to creating a modern, central bank-issued digital currency designed for everyday payments.
Under the Council’s agreed position, the digital euro would be issued by the European Central Bank and could be used anytime and anywhere, whether people are connected to the internet or not. This dual functionality is meant to combine the convenience of digital payments with the reliability and privacy that people associate with cash.
Earlier, some policymakers had pushed for an offline-only model. Fernando Navarrete, who has been leading the digital euro discussions in the European Parliament, had argued that limiting the system to offline use would better protect user privacy and make the currency more resilient in times of crisis. In his vision, the central bank would act primarily as a regulator rather than being involved in processing transactions in real time.
The EU Council, however, opted for a broader approach. In its view, allowing both online and offline transactions would make the digital euro more practical for daily use. Online payments would be processed instantly through the central bank’s ledger or via authorised intermediaries such as banks and payment providers. Offline payments, on the other hand, could be recorded locally on a device and later synced with the central system once an internet connection becomes available. This means the digital euro could still be used in areas with weak connectivity or during temporary outages, while also offering cash-like privacy for smaller, offline transactions.
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Digital Euro And The European Central Bank
The European Central Bank sees the digital euro as a necessary response to the rapid decline in cash usage across Europe. As more people rely on cards, mobile apps, and private digital payment systems, central bank money risks becoming less visible in everyday life. A digital euro would help ensure that public money remains relevant in an increasingly digital economy, while also supporting monetary sovereignty and public trust in the euro.
Despite these goals, progress on the digital euro has been slow. Parts of the banking sector have expressed concern that a widely used digital euro could draw deposits away from commercial banks, potentially affecting their ability to lend. To address these risks, the Council’s mandate includes limits on how much digital euro an individual or business can hold. These limits will be set by the European Central Bank and reviewed every two years, with an overall cap designed to protect financial stability.
The Council also outlined how fees would work. Basic digital euro services would have to be offered free of charge to users, ensuring broad access. Providers would be allowed to charge for additional, value-added services. To avoid disruption in the payments market, there will be a transition period of at least five years during which interchange and merchant fees are capped at levels similar to existing payment methods. After that, fees can be adjusted based on actual costs.
Another key reason the Council supports offline functionality is resilience. Ministers highlighted that the digital euro should remain usable during power outages or technical failures, making it a reliable backup to existing payment systems. At the same time, online access is seen as essential for supporting a wide range of digital payments in a modern economy.
With this agreement in place, formal negotiations can now begin between the EU Council and the European Parliament to finalise the legal framework for the digital euro. The Council represents the governments of EU member states and works alongside the Parliament to pass EU laws.
Once the legal framework is adopted, the European Central Bank can move ahead with issuing the digital euro. The ECB has indicated that a pilot phase could begin in 2027, with the digital euro potentially becoming operational by 2029. If successful, it would mark one of the most significant changes to Europe’s payment system since the introduction of the euro itself.
