EU backs offline and online digital euro payments

European Union governments agreed to support both offline and online versions of a digital euro, marking a key step in negotiations over the bloc’s future public digital money. The decision came as the Council of the European Union adopted its formal negotiating position, allowing talks with the European Parliament to advance.

The Council framed the digital euro as a complement to cash, not a replacement. At the same time, it tied the project to new rules aimed at strengthening the role of physical euro banknotes and coins across member states.

Offline and online payments move together

Under the Council’s position, the digital euro would launch with both online and offline functionality. Online payments would rely on standard digital infrastructure and authorised intermediaries. Offline payments, by contrast, would work without an internet connection and sync later, allowing transactions during outages or in low-connectivity areas.

This approach reflects a shift in the policy debate. Earlier discussions focused heavily on offline use as a way to mirror cash. However, governments now argue that offering both modes together improves usability while keeping resilience and privacy goals in scope.

In addition, the Council endorsed limits on how much digital euro individuals can hold. The European Central Bank would set these caps and review them regularly, aiming to prevent large shifts of deposits away from commercial banks while still enabling everyday payments.

Privacy, fees, and cash protections

Alongside functionality, the Council addressed privacy and cost concerns. It supported a design where basic digital euro services remain free for users. Payment providers could charge only for optional features, and even then under defined conditions.

Moreover, the Council backed transitional caps on merchant and interchange fees. These caps would apply for several years after launch and later align with actual processing costs. Lawmakers argued this structure would support merchant adoption while avoiding new payment monopolies.

At the same time, governments linked the digital euro file to stronger cash protections. The Council called for clearer rules to ensure cash acceptance across the euro area, subject to limited exceptions. Member states would also need to monitor access to cash and prepare contingency plans for disruptions to electronic payments.

Separately, European data protection experts continued to examine whether an offline digital euro could achieve cash-like privacy. Their recent technical work suggested such a model remains possible but requires careful cryptographic design and realistic security assumptions.

With the Council’s position now set, negotiations with the European Parliament will determine the final balance between privacy, resilience, and financial stability as the digital euro project enters its next phase.