The digital euro is a planned central bank digital currency (CBDC) issued by the European Central Bank (ECB). Its objective is to future-proof Europe’s payment system, strengthen monetary sovereignty, and provide citizens with a secure, efficient, and privacy-focused alternative to existing digital payment methods. 

The introduction of the digital euro marks also a significant development for the European finance sector. As a planned digital currency, it aims to future-proof Europe’s payment system while reshaping how financial institutions, corporates, and payment providers operate in an increasingly digital environment. Beyond a technological innovation, the digital euro represents structural change across payment infrastructures, regulation, and market expectations. 

Navigating this evolving landscape requires a clear understanding of both regulatory developments and practical implementation challenges. With extensive expertise in payment processes and financial infrastructure, alseda Consulting supports organisations across the finance sector in assessing these changes early and translating them into sustainable strategic decisions. 

Current status of development 

The ECB completed the investigation phase (2021–2023) and moved into the preparation phase on 1 November 2023. The ECB reports that this preparation phase ran until October 2025, focusing on finalising key building blocks and supporting the legislative process. 

During this period, the ECB worked on: 

• a digital euro rulebook (including user experience, brand guidelines and dispute resolution), 

• the selection of technical providers for platform components and interfaces, 

• an innovation platform with ~70 market participants, testing use cases such as conditional payments and experimentation to inform design choices, 

• ongoing user research and stakeholder engagement to validate requirements and adoption factors.  

The next stage covers technical implementation and piloting, while legislative work continues in parallel. The ECB’s working assumption is that, if EU lawmakers adopt the regulation in 2026, pilots/initial transactions could start as early as mid-2027, with a potential first issuance around 2029. 

Political framework 

On 19 December 2025, the EU Council agreed its negotiating position, supporting a model that includes both online and offline functionality and addressing holding limits to safeguard financial stability. The proposal now proceeds through the EU legislative process with the European Parliament and Council.  

Why a digital euro? 

As payments become increasingly digital and global providers such as Visa, Mastercard, and Big Tech platforms gain dominance, Europe’s dependence on non-European players has grown. The digital euro is intended to reduce this dependency while carrying key benefits of cash—such as security and privacy—into the digital space. It is not designed to replace cash, but to serve as an additional option available to all citizens. 

Pros & Risks 

The digital euro could bring major benefits: it would be backed by the ECB, offering trust and stability; improve financial inclusion by enabling digital payments beyond traditional banking; and make payments faster and cheaper, especially across the EU. The ECB is also aiming for strong privacy protection and offline payments, while strengthening Europe’s autonomy in a market currently dominated by global card networks and Big Tech. 

At the same time, key challenges remain—balancing privacy vs. security, managing potential risks to bank deposits and lending, and overcoming technical complexity, the digital divide, and high implementation costs. 

Conclusion 

The digital euro is set to reshape Europe’s financial architecture—but its path to adoption remains uncertain. While it promises improvements in security, privacy, and strategic autonomy, it also raises complex questions around technical delivery, data protection, and potential effects on the banking system. 

The European Central Bank is taking a cautious and phased approach to the introduction of the digital euro, aiming to minimise risks while building trust among market participants and users. If developments proceed as planned, the digital euro could become a reality from 2029 onwards, potentially reshaping the European payments landscape in a lasting way. 

The market for digital and virtual payment methods continues to evolve rapidly. As payment experts, alseda Consulting supports clients and partners in identifying and assessing regulatory and technological developments at an early stage. By continuously monitoring market changes and industry processes, we work together to establish future-proof strategies that ensure portfolios remain up to date and can be developed in a targeted and sustainable manner. 

To stay informed about developments in digital payments and their impact on corporate and banking payment processes, follow our blog for further insights and updates. 

Contact us for more information at infomail(at)alseda.com