The European payment system enters the digital age: what will change for users?

The European Union Council has approved a comprehensive regulatory framework for the potential introduction of digital euro, while guaranteeing the primacy of cash in the euro area. This groundbreaking decision is of fundamental importance for the EU’s economic security and the independence of its payment infrastructure in the digital age.

Digital euro: a complement, not a competitor to cash

A key agreement is to treat digital euro solely as a supplement to traditional forms of payment. The new instrument will be available to both citizens and businesses, enabling transactions both online and offline across the euro area, including payments without internet access.

The European Central (Bank) will serve as the direct operator, maintaining central bank money as a fundamental guarantee of trust. However, to prevent unjustified accumulation of this form of money, the ECB will set limits on the storage of digital euros in wallets and user accounts, with reviews at least every two years.

Consumer protection and open payment markets

The regulations explicitly prohibit charging consumers fees for basic operations — opening wallets, closing accounts, or executing transactions. A transitional period of at least five years is planned for merchants, during which commissions will be limited to levels comparable to other payment instruments.

Digital euro will coexist with private solutions, such as banking apps or traditional cards. High privacy standards are guaranteed at the regulatory level, and users will retain full control over their data.

Cash remains — regulations protect it

The EU Council confirms the unassailable status of euro banknotes and coins as the only legal tender in the euro area. Merchants will be required to accept them in most retail transactions, with exceptions only for remote sales or fully automated systems.

All member states must monitor cash availability and prepare contingency plans in case of disruptions in electronic payment systems — an increasingly relevant scenario in a world where even ATMs and internet-connected calculators can sometimes fail.

Implementation schedule: from plans to reality

According to ECB’s two-phase strategy:

• By 2026: preparing infrastructure for digital euro retail payments and launching cross-border settlements for transactions based on distributed ledger technology (DLT)
• From 2026: integrating the TIPS system with payment infrastructures of other countries to accelerate international transactions

If the European Parliament and the EU Council approve the relevant regulations, pilot operations could begin in mid-2027, with full issuance of digital euro expected in 2029.

Strategic context: why now?

ECB Executive Board member Piero Cipollone points out that without active involvement of central banks, official forms of money could lose significance compared to private and foreign payment solutions, including dollar-denominated stablecoins. Digital euro is a response to these challenges, protecting European autonomy in the financial system.

In October 2025, the ECB signed framework agreements with technology operators developing key components of digital euro, indicating concrete steps toward the realization of this project.

The transformation of the European monetary system is already underway — both from a regulatory and technical perspective.