Whether at the bakery, an online shop, or buying a quick coffee: Germans are increasingly paying cashlessly. According to the Bundesbank, the proportion of digital payments has been rising steadily for years. In 2025, more than half of all transactions and over three-quarters of total sales in Germany were cashless for the first time.

Against this backdrop, politicians and the European Central Bank (ECB) launched the "digital Euro" project. It involves creating a digital twin of physical cash, designed to function as a comprehensive, cross-border, digital payment infrastructure for the entire Eurozone. According to the ECB, European payment systems currently have structural weaknesses. A recent analysis found that in two-thirds of Eurozone countries, citizens rely solely on the infrastructure of international—mostly U.S.-based—providers for card payments. In the first half of 2024, 66% of all card payments in the Eurozone were already handled by international systems. There is no pan-European alternative for large parts of Europe in digital commerce.

After presenting its final report on a preparatory phase at the end of 2025, the ECB is currently in negotiations at the European level for introducing the digital Euro.

What is the digital Euro – and what isn't it? 

In short, the digital Euro belongs to the category of central bank money. Like cash, it’s issued directly by the central bank. It's important to distinguish this from existing systems: the digital Euro is not a cash replacement but is intended explicitly to complement physical cash, which will remain in circulation—and even get a new design after about 25 years.

Additionally, the digital Euro is backed by a state community—unlike cryptocurrencies such as Bitcoin. Therefore, it is just as secure and stable as money in your wallet. Lastly, the digital Euro is more than electronic or commercial bank money: those paying by card or banking app today use so-called commercial bank money created by private banks. By contrast, the digital Euro represents a direct, state-guaranteed claim against the central bank.

The Three Grand Promises: Resilience, Costs, and Data Privacy 

Proponents of the project see the digital Euro as a historic opportunity to future-proof European infrastructure on three levels:

1. Independence and Resilience: Today, electronic payments often rely on the infrastructure of large, mostly non-European corporations like Visa, Mastercard, or PayPal. In times of crisis or geopolitical tensions, this dependence could be used as a political bargaining tool. The digital Euro offers a purely European payment system, ensuring the monetary sovereignty and strategic autonomy of the Eurozone.

2. Lower Costs for the Economy: Every card payment incurs fees for merchants and businesses, which add up significantly. The ECB aims to create a cost-effective alternative with the new digital currency, fostering competition and especially alleviating the burden on retail.

3. Privacy Like Cash: Current digital payment systems involve data passing through multiple intermediaries, leaving it susceptible to potential misuse. The digital Euro promises shorter paths by eliminating third-party infrastructures of conventional digital payments while adhering to the highest EU data privacy standards. Particularly noteworthy: An offline function (e.g., for person-to-person payments) is envisioned. Here, only the sender and recipient know about the transaction: maximum anonymity—just like cash.

Beyond everyday shopping, the currency enables businesses to automate payments. A practical example from logistics: Once a delivery arrives at a warehouse and is scanned, the system triggers payment automatically—no manual effort or bureaucratic approval processes involved. Businesses could also cost-effectively carry out usage-based billing (pay-per-use) or micropayments.

Sharpening Added Value, Ensuring System Stability 

Despite its potential, healthy scepticism is warranted. Established digital payment systems offered by private providers already exist. Hence, the promised added value of a digital Euro must not only be proclaimed but also materially reflected in tangible advantages. Otherwise, it would merely be another competitor in the digital payment service market.

Additionally, a widespread withdrawal of customer deposits—a digital bank run—could jeopardise the stability of the banking system in a crisis scenario, with individuals pulling money from current accounts to convert it into digital Euros. Financial institutions, which use current account deposits for liquidity management, could face challenges. To prevent this, there will be a holding limit. Currently, an upper limit of between 500 and 3,000 Euros per person is under discussion, and balances will not earn interest.

The Digital Euro Becomes Reality 

Last week, the Committee on Economic and Monetary Affairs of the European Parliament positioned itself. In the second half of 2026, trilogue negotiations between Parliament, Commission, and Council in Brussels will begin, entering the pivotal phase of the legislative process. Thus, the digital Euro could become a reality on our smartphones and POS terminals by 2029.

Given its high relevance to the entire commercial economy, the Executive Board of the Association of German Chambers of Commerce and Industry commented on the introduction of the digital Euro on 25 June. A position was adopted, developed with close involvement of our member companies from various sectors of the real economy and the financial sector.