The European Union has taken a major step toward reshaping the future of its currency system after the EU Council agreed on its negotiating position for two key regulations aimed at strengthening the euro. The move paves the way for the possible introduction of a digital euro while reinforcing the legal tender status of physical cash across the bloc.
Meeting in Brussels, the permanent representatives of the EU’s 27 member states, gathered under the Council’s COREPER committee, said the proposals would enhance the EU’s strategic autonomy, economic security, and resilience. The measures focus on creating a legal framework for a potential digital euro and safeguarding the continued acceptance and availability of cash.
The digital euro would function as a public form of money issued by the European Central Bank (ECB), complementing, not replacing, banknotes and coins. Available for both online and offline use, the digital euro would allow payments even without an internet connection and offer a high degree of privacy. It would coexist alongside private payment systems such as cards and mobile payment applications.
Danish Minister for Economic Affairs Stephanie Lose, whose country currently holds the rotating Council presidency, said the initiative would strengthen Europe’s payment infrastructure and support the international role of the euro.
To mitigate financial stability risks, the proposal includes limits on how much digital euro individuals can hold in digital wallets or accounts. While the ECB would set these limits, they would be bound by an overall ceiling agreed by the Council and reviewed every two years.
Consumers would not be charged for essential services such as opening accounts, making payments, or transferring funds, though fees may apply to optional value-added services. The framework also ensures fair access for payment providers to mobile device hardware and software.
Alongside the digital euro, the Council reaffirmed the central role of cash as the euro area’s only legal tender. The proposal seeks to prevent unjustified refusals of cash, except in specific cases such as online transactions or unmanned outlets, while ensuring citizens retain freedom of payment choice.
With the Council’s position now agreed, negotiations with the European Parliament will begin. The ECB has indicated that, if approved, the digital euro could become operational by 2029.