- The EU Council has endorsed the European Central Bank design for a digital euro with online and offline functions.
- Lawmakers still debate privacy levels, holding limits and merchant acceptance rules that will shape the final form.
- Apostolos Thomadakis warns privacy and anti-money laundering rules are among the toughest political trade-offs.
- The European Commission notes broad support for legal tender status, offline capability, privacy safeguards and inclusion measures.
- CBDC activity is accelerating globally; delays past 2026 could disrupt the ECB’s rollout timetable.
The EU Council recently backed the European Central Bank design for a digital euro that would work both online and offline, intensifying debates over privacy, holding limits and merchant rules across EU institutions. Officials and experts say these trade-offs will determine the final legal and operational framework ahead of pilot projects and rollout.
Apostolos Thomadakis, head of the financial markets and institutions unit at a European think tank, described “cash-like privacy” with anti-money laundering rules as one of the digital euro’s “hardest political tradeoffs.” He expects negotiations to yield a compromise that keeps an online option for everyday retail use while strengthening enforceable privacy safeguards.
A representative of the European Commission said it “cannot speculate on the outcome of the deliberations,” but added that “There seems to be general support across stakeholders for a number of key features of the Commission proposal, including the digital euro’s legal tender status, its offline functionality, strong privacy and data protection safeguards as well as financial inclusion-related aspects.” Key unresolved items include the online privacy level, acceptance rules and service provider compensation, plus holding limits aimed at preventing bank deposit flows.
Mireia Llambrich Anto, financial services assistant at The European Consumer Organization, said the emerging consensus favors a dual online-offline model to support resilience and privacy while preserving the financial system through holding caps. Observers note that if the legal work extends significantly beyond 2026, the ECB’s implementation timetable could be affected.
CBDC efforts are widespread: an Atlantic Council count shows at least 137 countries or currency unions covering about 98% of global GDP have explored CBDCs. Separately, China’s digital yuan program plans to allow commercial banks to pay interest on CBDC wallets starting in 2026.
Image credit: European Parliament photo by Diliff under CC BY-SA 3.0.
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