EU Council finalizes legislative stance on "Digital Euro": CBDC to coexist with cash, rollout as early as the second half of 2026

The Council of the European Union announced today (19th) that it has officially agreed on the negotiation stance regarding the digital euro, representing a formal consensus among the 27 EU member states’ governments on the legislative framework for the digital euro.
(Background: ECB President: The core system of the digital euro CBDC has been completed, with the earliest rollout expected in the second half of 2026)
(Additional context: ECB: The digital euro is expected to be launched in 2029, contingent upon completing relevant legislation by 2026)

The Council of the European Union announced today (19th) that it has officially agreed on the negotiation stance regarding the digital euro, representing a formal consensus among the 27 EU member states’ governments on the legislative framework for the digital euro. Notably, this stance is part of the “single currency package,” which also includes proposals to strengthen the legal tender status of euro cash, marking significant progress in the EU’s digital transition of public money.

Digital euro coexists with cash

The stance adopted by the Council mainly includes two key regulations: first, establishing a legal framework for the potential issuance of the digital euro; second, ensuring the continued widespread acceptance and availability of cash within the EU.

The announcement states that the digital euro will serve as a complement to cash, directly backed by the European Central Bank (ECB), providing the public and businesses with a public option for payments anytime and anywhere within the euro area. The system supports online and offline use, emphasizes high privacy protection, and coexists with existing private payment tools (such as credit cards and mobile payment apps), without replacing them.

To maintain financial stability, the stance also specifies a cap on the total holdings of digital euro by the public, with the ECB responsible for setting specific limits, which must adhere to an overall cap reviewed every two years by the Council. Additionally, payment service providers are prohibited from charging consumers for mandatory services such as account opening, closing, and basic payment transactions; value-added services may incur fees. During the transition period, merchant-related fees will also be capped, after which fees will be based on actual costs.

Regarding cash, the Council emphasizes that euro cash remains the only legal tender in the euro area and must generally be accepted for the payment of goods, services, and debt settlement. The stance leans toward prohibiting retailers or service providers from refusing cash without reason, with only a few exceptions such as online shopping or vending machines. Member states are also required to monitor cash acceptance, ensure access to cash for the public, and develop contingency plans for large-scale electronic payment disruptions.

Digital euro plan advances further

Since the ECB launched the investigation phase in 2021, the digital euro project has undergone years of preparation. However, on December 18th, ECB President Lagarde announced at the final press conference of the year that the development of the core system for the digital euro has been fully completed, with the next step being legislative approval by the European Council and Parliament. If the timeline proceeds as planned, the eurozone will enter an era of both official CBDC and private stablecoins in the second half of 2026.

EU officials generally see this progress as an important signal of the EU strengthening strategic autonomy in the payments sector, especially amid the current high dependence on non-EU infrastructure for digital payments. ECB President Lagarde and other officials have repeatedly emphasized that the digital euro will enhance European monetary sovereignty, payment system resilience, and economic security, while reaffirming that cash will not be replaced but will coexist with digital forms, providing more payment options for the public.

Next, the EU Council will engage in trilogue negotiations with the European Parliament to expedite the legislative process. Once passed, this will lay a solid legal foundation for the future issuance of the digital euro.