EU Clears Path for Always-On Digital Euro, Online and Offline
What Did the EU Council Decide on the Digital Euro?
EU member state governments have agreed on a negotiating position that would allow the digital euro to function both online and offline, moving away from earlier proposals in the European Parliament that leaned toward an offline-only design. The position, endorsed on Friday by the Council of the European Union, supports a digital currency issued by the European Central Bank that can be used “anytime, anywhere,” regardless of internet connectivity.
Under the Council’s plan, online payments would be processed immediately through the central bank’s ledger or via authorised intermediaries. Offline payments, by contrast, could be recorded locally on a user’s device and later synchronised with the central ledger once connectivity is restored. This structure would allow transactions in areas with poor network coverage while preserving cash-like features for smaller, in-person payments.
The Council’s approach departs from the stance promoted by Fernando Navarrete, the European Parliament’s rapporteur on the , who has argued for an offline-only model. His proposal focused on limiting firmly in charge as regulator rather than transaction processor.
Investor Takeaway
Why Is the Council Pushing for Both Online and Offline Use?
Council ministers cited flexibility and system resilience as key reasons for supporting offline capability, particularly in scenarios involving power outages or network disruptions. At the identical time, they argued that limiting the digital euro to offline use would restrict its relevance in a payments landscape increasingly shaped by online commerce, wallets.
The ECB has framed the digital euro as a way to modernise Europe’s payments infrastructure and keep relevant as cash usage declines. A publicly issued would also give the euro area a state-backed alternative to private payment platforms and foreign-issued stablecoins, reinforcing monetary sovereignty.
Still, progress has been sluggish. Parts of the banking sector have raised concerns that a digital euro could draw deposits away from commercial banks, especially during periods of stress. The Council’s mandate attempts to address those fears by building in secureguards around holdings and fees.
What secureguards Are Built Into the Council’s Proposal?
To limit potential disruption to the banking system, the Council’s position includes caps on how much digital euro individuals can hold. The ECB would set these thresholds, subject to an overall ceiling that must be reviewed every two years. The goal is to prevent large-scale of deposits from banks into central bank money.
The framework also addresses pricing. Providers would be required to offer basic digital euro services free of charge, while additional features could carry fees. For an initial transition period of at least five years, interchange and merchant fees would be methods. later than that, fees could be adjusted based on actual operating costs.
These measures reflect an effort to balance usability with financial stability, while avoiding a sudden reshaping of and payments markets.
Investor Takeaway
What Happens Next in the Digital Euro Process?
The Council’s agreement clears the way for negotiations with the European Parliament on the legal framework governing the digital euro. Under EU law, both institutions must align on the final text before legislation can be adopted. Once that happens, the ECB would be able to proceed from design and testing into issuance.
The central bank has said a pilot phase could begin in 2027, with the digital euro potentially becoming operational by 2029. That timeline reflects both the technical complexity of the project and the political sensitivity around data protection, banking stability and the role of public economy.
For now, the Council’s stance sets the tone for talks: a digital euro that works online and offline, supports everyday payments, and remains under public control. Whether Parliament accepts that balance will determine how rapidly Europe moves from concept to launch.
