The digital euro could bring a new form of public money into everyday digital payments. This article looks at how it could affect daily life, what would remain unchanged, and the potential benefits for people across the EU.
The digital euro has become a major topic in Brussels, featuring in discussions about digital policy, geopolitics and European strategic autonomy.
For many people, however, the question is much more straightforward: what would actually change in everyday life?
The digital euro could change the way people make payments across the euro area. It would not replace the financial services offered by banks, but it would introduce another electronic payment option that could be available more broadly and reduce reliance on privately operated payment systems.
Understanding the proposal starts with looking at both sides of the question: what could change and, just as importantly, what would remain the same.
Today, cash is the only form of central bank money that individuals in the euro area can hold directly. It is backed by the central bank, can be used without relying on a private financial intermediary, and retains its face value.
As more everyday transactions move online, the need for a publicly backed form of digital money is becoming increasingly relevant.
The digital euro would be issued by the European Central Bank and would provide an additional way to make digital payments alongside existing private services. Put simply, it would be a digital form of cash.
Money held in a bank account is created by a commercial bank. Although bank deposits are regulated and generally protected by the financial system, they ultimately rely on private banking institutions.
Cryptocurrencies are different again. They are digital assets developed by individuals, companies or open-source communities and are generally not issued or guaranteed by a central bank. Many cryptocurrencies can also experience significant price fluctuations.
The digital euro would occupy a different position. As money issued by a central bank and backed by public institutions, it would provide a public alternative within a digital payments environment currently dominated by private providers.
Although electronic payments have become commonplace, access to them is not the same for everyone. Making digital payments generally requires access to a bank account or another payment provider and may involve onboarding requirements, identification documents or other eligibility conditions.
For some vulnerable groups, these requirements can create practical barriers. Maintaining a bank account may be difficult or, in some cases, impossible. A 2024 Finance Watch study found that in some EU Member States, almost 31% of people over the age of 15 did not have a bank account. Fees associated with payment accounts, including basic accounts, can be one factor contributing to these barriers.
Merchants also pay transaction fees when customers use certain private payment platforms. These expenses can ultimately be reflected in the prices consumers pay for goods and services, including for people already at risk of poverty or social exclusion.
Digital payment methods are also not universally accepted, particularly for small transactions. Some existing systems can become unavailable during power failures, technical disruptions or cyber attacks.
In some European countries, current legislation even allows merchants to refuse cash.
Together, these issues raise the wider question of payment resilience: reducing dependence on individual systems and ensuring people have different ways to make payments when one option becomes unavailable.
Supporters of the digital euro argue that it could address some of these everyday challenges experienced across the EU.
Because the digital euro’s infrastructure would be developed under the responsibility of the European Central Bank, its supporters argue that merchant fees could be lower than those associated with some existing private payment services, potentially reducing costs for businesses and consumers.
Basic digital euro payment accounts would also be available through intermediaries, potentially providing an alternative for people who do not currently have access to a bank account.
Access to digital public money would not be intended to depend entirely on individual commercial providers or their conditions. The digital euro is therefore being designed as part of the basic payment infrastructure and would be available to individuals and businesses across the euro area.
Like cash, the system is intended to fit into everyday activities without requiring advanced technical knowledge or specialist financial expertise.
In this respect, the digital euro can be viewed as part of essential public infrastructure, similar in principle to other services intended to be broadly accessible rather than restricted to particular groups.
The precise way people would access and use the digital euro depends on legislative decisions that are still being discussed. Current proposals nevertheless provide an indication of how it could work in practice.
Users could access digital euros through a digital wallet, mobile application or payment card. The payment experience would be designed to resemble familiar methods such as mobile banking and existing electronic payment platforms.
Potential uses could include:
Paying for goods and services online or in physical shops
Sending money to other people
Receiving payments, including wages or transfers
Banks offering payment accounts would be required to provide digital euro services, but authorised public intermediaries could also offer access.
These providers could include local or regional authorities and post offices, meaning that having a conventional bank account would not necessarily be required.
Some form of identification, verification and onboarding would nevertheless likely remain necessary, although the process is intended to be accessible to a wider range of people.
Financial inclusion is one of the objectives associated with the digital euro. Basic services are expected to be free for users, helping ensure that fees or commercial conditions do not prevent people from making digital payments.
Accessibility measures, including features such as voice-controlled transactions and larger text, could also make the system easier to use for older people, people with disabilities and individuals with limited digital skills.
The digital euro is also intended to support offline payments, meaning transactions could take place without an active internet connection.
By storing a limited amount of digital currency locally on electronic devices, users could potentially continue making payments during temporary outages or in locations with limited connectivity.
In a consumer survey covering 10 EU countries, Finance Watch member BEUC, the European Consumer Organisation, found that many respondents expressed concerns about privacy, fraud and scams.
According to the European Commission, the digital euro is being designed with security and different levels of privacy depending on how it is used.
For organisations such as Finance Watch, an important measure will be whether the digital euro can provide privacy protections similar to cash, particularly for offline and low-value online transactions.
For online payments, payment service providers would process personal information required to complete transactions and help prevent fraud and money laundering.
Offline transactions are intended to offer a level of privacy closer to cash. Intermediaries would need access to certain information for activities such as deposits, withdrawals and transferring funds to or from local storage devices, but would not be able to see individual transaction details.
The European Central Bank would not have access to users’ personal transaction data and would be subject to oversight by independent supervisory authorities to ensure compliance with EU data protection requirements.
The digital euro is being developed as an addition to cash, rather than a replacement for it. Cash would continue to play an important role in the eurozone and the introduction of the digital euro would not remove its status as legal tender.
The project reflects the changing nature of payment systems by creating a way to use publicly issued money in digital transactions without eliminating existing payment methods.
In practical terms, people could have more options depending on the situation, including cash, payment cards, bank transfers and digital wallets.
The introduction of a publicly backed digital payment method that could be used both online and offline would add another option for everyday payments across the EU.
Alongside cash and privately operated payment services, it would extend the role of public money into the digital economy. If implemented, it could also provide another payment option during disruptions to existing digital infrastructure.
A physical payment card available free of charge – an option highlighted by organisations such as Finance Watch – could also help people who do not own smartphones or who have limited digital skills access the system.
At the same time, many existing payment methods would remain unchanged. Cash would continue to exist and retain its legal status. Private payment providers would remain part of the financial system, while commercial banks would continue providing their existing range of financial services.
In short, the digital euro would introduce an additional public payment option rather than replacing the ways people currently pay.
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