A working almanac Sunday, 8 November 2026
Reviery

 —  7 min read

So what actually is the digital euro?

I couldn't explain it beyond "some kind of euro on your phone", so I went through what the ECB and the EU institutions have actually published. Here's the basic picture.

Over the summer the digital euro kept turning up in the news. The European Parliament voted on it in July, and the reactions in my feeds split into two camps: one half treated it as the beginning of the end for cash, the other half assumed it was the ECB’s very late answer to Bitcoin. I nodded along to both, which is never a good sign. When I tried to put it into my own words I got as far as “some kind of euro on your phone” and stalled.

So I did the unglamorous thing and read the official material, mostly the ECB’s own FAQ and the documents from the EU legislative process. These are my notes. I’m splitting them into small pieces, and this first one sticks to the basics: what the thing actually is, and why the people behind it think Europe needs it now.

The short version

The ECB describes it as “a digital form of cash, giving consumers access to central bank money in digital form.” Same currency, same euro. It would be issued by the Eurosystem (the ECB together with the national central banks of the euro countries), and you’d get it through your bank or another supervised payment provider, in an app or on a card. You could pay with it in a shop or online, or send some to a friend.

The official descriptions keep returning to the same handful of features:

  • Basic use would be free for individuals.
  • Payments would work online and offline. Offline ones are meant to be about as private as cash, with only the payer and the payee knowing the details.
  • No interest. The ECB compares it to cash in your wallet, which doesn’t earn anything either.
  • There’d be a cap on how much one person can hold. The number hasn’t been decided yet; the ECB has tested hypothetical limits of up to €3,000.
  • Under the Commission’s proposal it would be legal tender, so as a rule shops would have to accept it.

One misconception I could cross off straight away: it isn’t a cryptocurrency. According to the ECB the digital euro is “not based on distributed ledger technology”, so there’s no blockchain at its heart, and settlement runs on a central platform. Stablecoins and Bitcoin are a different animal altogether. That comparison is interesting enough that I’ll probably give it a post of its own.

The part that made it click

Honestly, the definition didn’t mean much to me until I asked myself a slightly odd question. What kind of money do I actually have?

I’d always treated the notes in my wallet and the balance in my bank account as the same thing. At the checkout they behave identically, yet they’re different kinds of money. A banknote is central bank money, a claim on the ECB itself. My account balance is money my bank owes me. Most of the time you’d never notice the difference. Banks can fail, though, which is why deposit insurance exists: in the EU, deposits are protected up to €100,000 per depositor per bank. Further down the ladder you find e-money balances held with payment companies, and below those stablecoins and crypto-assets, whose value depends on whoever or whatever stands behind them.

So today an ordinary person has exactly one way to hold central bank money. Cash. The digital euro would add a second one, in digital form.

Once I looked at it like that, a lot of the later arguments fell into place. Take the holding cap: it exists because nobody wants people moving their savings out of banks and into central bank money overnight. That also explains why banks aren’t exactly thrilled about the whole project. Both topics need more room than I have here, so they’ll get their own posts.

Why now? Because cash is shrinking

Every couple of years the ECB surveys how people in the euro area pay. The study is called SPACE, and counted by number of transactions, the share of in-store payments made in cash looks like this:

Survey yearPaid in cash
201679%
201972%
202259%
202452%
Share of point-of-sale transactions paid in cash, euro area. Source: ECB, SPACE 2024.

Measured by value the picture is starker. In 2024 cash covered 39% of point-of-sale spending, and cards 45%.

What surprised me more was the attitude part of the same survey. 62% of people said having cash as a payment option is important or very important to them. And yet 55% said they prefer paying by card or other cashless methods in shops, with only 22% preferring cash. We want cash to stay around and then tap our card anyway. I’m guilty of that one myself.

Here’s how the ECB argues it. If cash keeps fading, the money people use day to day ends up being entirely private: bank balances, with whatever card network or app happens to sit on top. Public money would still exist, technically, but mostly in a drawer at home. A digital euro is supposed to keep a public option where payments actually happen now. I find that reasonable. I also keep in mind that this is a central bank making the case for its own project, and that banks and plenty of economists read the situation differently. Their side gets a post too.

The surprise: a cash law came in the same package

This one I didn’t see coming. When the European Commission proposed the digital euro in June 2023, it put a second proposal on the table the same day, about the legal tender status of cash. Two questions sit behind that: whether shops have to take cash, and whether people can still get hold of it.

EU governments agreed their position on both in December 2025. On the cash side, the Council wants to effectively stop shops and service providers from refusing cash, with exceptions mainly for things bought at a distance, like online orders. Member states would also have to keep an eye on whether cash is accepted and make sure people can get cash everywhere in their territory. The ECB’s own line is that the digital euro “would complement cash, not replace it.”

After reading so many times that the digital euro is a trojan horse for abolishing cash, finding a rule meant to protect cash bundled into the very same package caught me off guard. Whether it survives the final negotiations intact is another question.

Where things stand right now

Short answer: there’s no digital euro yet, and whether there will be is still a political decision. Roughly how we got here:

  • June 2023: the Commission publishes its proposal.
  • October 2025: the ECB moves the project into its next phase and says it wants to be ready for a possible first issuance in 2029, provided the law is adopted during 2026.
  • December 2025: EU governments agree their negotiating position in the Council.
  • 23 June 2026: the Parliament’s economic and monetary affairs committee adopts its report, 43 votes to 14 with one abstention.
  • 9 July 2026: three political groups had challenged that committee decision, so the full Parliament voted on it and confirmed it, 416 to 169 with 22 abstentions.
  • Since then: closed-door negotiations between Parliament, Council and Commission, the so-called trilogues. By late October the Parliament’s own tracker counted five rounds.

If the law is done by the end of this year, the ECB plans a 12-month pilot starting in the second half of 2027. Development is estimated at about €1.3 billion up to the first issuance, plus roughly €320 million a year to run it from 2029. The ECB also says it will only decide whether to issue a digital euro at all once the law has been adopted. So whenever you see “2029” in a headline, read it as a target with conditions attached.

Next up

That’s the foundation. Next I want to dig into the holding cap, because a surprising share of the fighting is about one number. Privacy and offline payments are on my list as well, since that’s where most of the worry I see online comes from.

Sources

Everything above comes from these, checked in early November 2026: