| Deutsche Bundesbank

Would the digital euro replace cash?
Neither the Bundesbank nor the Eurosystem want to do away with cash. We want anyone who would prefer to pay with cash to also be able to do so in future without any restrictions. The Bundesbank and the Eurosystem are therefore emphatically committed to preserving cash. Here are a few examples.
New euro banknote series: we are working intensively on a new banknote series that meets the latest technical standards in order to stay ahead of counterfeiters. The design selection process is under way and we are ensuring that cash remains safe and modern in the long term.

New Bundesbank branches: to ensure the supply of cash, the Bundesbank is planning to establish four new branches. When constructing new buildings, we are making sure that we further optimise our processes and make them more efficient.

National Cash Forum: the National Cash Forum was established on the initiative of the Bundesbank in 2024. In this context, all stakeholders in the cash cycle are working together to develop strategies to guarantee the acceptance of and access to cash in the future as well.
We are also receiving political support in this area. The Commission’s legislative proposal (Single Currency Package), which aims to lay the foundation for the introduction of the digital euro, explicitly provides that both forms of central bank money – cash and the digital euro – will be equally recognised as official legal tender. Retailers would be obliged to accept both means of payment with only a few exceptions.
Would people have to pay to use the digital euro?

As a public good, the digital euro would be free for basic use by individual users.
Banks or other payment service providers could offer their customers additional, paid digital euro services. Such value-added services could make the digital euro even more attractive to users, for example for making conditional payments. These could allow customers to shop more safely online, with money only being transferred when the delivery of the product has been confirmed, thereby reducing the risk of fraud and simplifying refunds.
Would the digital euro be programmable money?

No, the digital euro is not intended to be programmable money. The European Commission has clearly stated this in its proposed regulation on the introduction of the digital euro (Art. 24(2)).
The euro is the legal tender of the euro area. It must be usable by everyone, for everything and at all times. Its value remains stable and will not change. As a digital form of the single currency, the digital euro will be exchangeable without restriction for any other euro. Programmability would contradict this. This is because programmable money is restricted to specific purposes. For example, it could only be used for certain goods, certain services or only during a certain period of time. This is precisely what is not intended for the digital euro.
This stipulation does not exclude “conditional payments”, i.e. automated payment transactions. For example, in the case of a conditional payment, the purchase price for a train ticket would only be debited if the train arrived on time. Or a parcel would only be paid for after successful delivery. These are things that should be possible with the digital euro.
How would the digital euro be different from stablecoins and crypto-assets?
The digital euro would be central bank money, issued and guaranteed by the Eurosystem, which comprises the ECB and the national central banks of the euro area. Like euro banknotes and coins, it would be legal tender, meaning everyone would be able to use it for payments. As central bank money and a public good, it would be stable and reliable.
Stablecoins are created by private companies. They are not guaranteed by a central bank or public authority. Their value depends on how well the company manages its reserves and finances, and this can be influenced by factors outside their control. This means their stability is not as certain as that of the euro.
Crypto-assets such as Bitcoin or Ether are different again. They are not backed by any institution and have no underlying value. Their prices can go up and down sharply, and there is no organisation responsible if they lose their value.

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Would the digital euro increase the money supply?
The digital euro is unlikely to increase the money supply.
Money supply is the stock of domestic means of payment held by non-banks that can be used for transactions. For example, the narrow monetary aggregate M1 in the euro area comprises currency in circulation and overnight deposits of domestic non-banks at domestic banks. It therefore comprises the means of payment that have a very high level of liquidity. The digital euro would also share this feature and would therefore probably be part of the monetary aggregate M1.
The planned introduction of the digital euro is unlikely to significantly change non-banks’ need for payment instruments and thus the money aggregate M1. However, the composition may shift if people exchange part of their cash holdings or bank deposits for digital euro.
Exchanging cash for digital euro would see one central bank liability exchanged for another. In this case, the money stock held by non-banks would remain unchanged. Within M1, the share of cash would fall and the share of digital euro would rise.
In the case of overnight deposits being exchanged for digital euro, non-banks’ overnight deposits would decrease to the same extent, meaning that the monetary aggregate M3 will not change immediately. Within M1, the share of overnight deposits would decrease and the share of digital euro would increase. In order to exchange customer deposits for digital euro, the bank carrying out the exchange would need central bank balances to purchase digital euro from the central bank.
In both cases, the relative share of cash or bank deposits in M1 would decline, while the share of digital euro would grow. The extent to which these shares will shift will depend on how people use the digital euro. However, the planned holding limit for the digital euro would cap its share.
Would the introduction of the digital euro make payments in Europe more vulnerable to cyberattacks?

As with other digital infrastructures, the digital euro could be a target for cyberattacks. To mitigate this risk, the design of the digital euro would employ state-of-the-art security and encryption technologies to create a cyber-resilient and future-proof environment. In the design of the cybersecurity controls, the ECB is making use of proven Eurosystem practices from other market infrastructures and regular planned testing against simulated attacks. System security is a key priority during development.
Would the digital euro be a product that competes with private sector offerings?

Although the euro has existed for over 25 years, there is unfortunately still no European payment method that works in all payment situations in all euro area countries – not even a private sector one.
The market is fragmented. There are solutions for today’s payment situations, but they are predominantly national solutions such as girocard in Germany. These solutions work within individual countries. Thanks to Visa or Mastercard, girocard payments also work in other euro area countries.
There are payment methods that can be used everywhere, but these are all from international, non-European providers.
In addition, over half of the euro area countries do not even use an own national card system like Germany’s girocard. This means that more than half of the euro area countries rely directly on international card systems, i.e. Visa and Mastercard.
The digital euro would not compete with private solutions. In fact, synergies could be exploited and private initiatives could be expanded more easily across the EU. This would enable the fragmentation in EU payments to be reduced.
Private initiatives could use the open standards of the digital euro and its legal tender status, since all retailers subject to an obligation to accept digital euro will use these standards. This could make it easier for private sector providers to expand beyond national borders.
How do other pan-European payment initiatives relate to the digital euro?

The ECB welcomes European market initiatives that reach beyond domestic markets.
The digital euro should enable domestic and regional schemes in Europe to scale up across different use cases and across borders, facilitating easier, broader and more efficient acceptance of European private sector solutions thanks to the use of harmonised standards. European payment service providers stand to benefit from these opportunities, primarily through increased geographical reach and use cases not previously served
The design envisages the possibility of integrating private solutions through, for instance, possible co-badging on physical cards and existing digital wallets (whereby two or more payment applications are included on one payment instrument). The digital euro would then be the “fall-back” that enables full pan-European reach while preserving market access for domestic or regional schemes where they are accepted.
Would payment service providers (PSPs) be compensated for distributing the digital euro?

The Eurosystem is proposing a compensation model that would create fair economic incentives for all parties involved in the digital euro ecosystem. For banks and other PSPs, the compensation model addresses the operational costs of distributing the digital euro.
As is currently the case with other payment systems, PSPs distributing the digital euro would be able to charge merchants for these services. Price setting for merchants and PSPs would be subject to a cap, as proposed by the European Commission in its digital euro regulation.
As with the production and issuance of banknotes, the Eurosystem would bear the costs of the establishment of the digital euro scheme and infrastructure. Moreover, the Eurosystem would aim to minimise additional investment costs for PSPs by reusing existing infrastructures as much as possible.
Would the digital euro pose a threat to financial stability by disintermediating banks?
Our financial system – with the banking system at its centre – functions well, and the Eurosystem wants to preserve the key role banks play in ensuring the efficient provision of credit to the economy.
The ECB has made the following design choices to minimise any potential risks the digital euro might pose to the financial system.
Users would only be able to hold a limited amount of digital euro in their account. This would prevent excessive outflows of bank deposits and help preserve the stability of our financial system, even in times of crisis.
Linking their digital euro wallet to a bank account would allow users to make payments above the holding limit and cover any shortfall instantly without having to prefund their digital euro wallet (assuming sufficient funds are available in the linked account).
As with cash in your wallet, no interest would be paid on digital euro holdings.
The ECB prepared a technical analysis to estimate the potential effects of various hypothetical holding limits, following a request that emerged during legislative negotiations. This analysis confirmed that using the digital euro for day-to-day payments would not harm financial stability and that – given the different hypothetical holding limits of up to €3,000 per person that the co-legislators asked to be tested – the impact of the digital euro would not harm financial stability within the euro area, even under a highly unlikely and extremely conservative crisis scenario.
How much would the digital euro project cost the Eurosystem?
Investing in the digital euro is key to ensuring our currency and payments sector remains fit-for-purpose in the digital age.
Some of the digital euro components, such as payment settlement, would be developed internally within the Eurosystem. For others, like the offline services component, we have established framework agreements with external providers. Giesecke+Devrient is one of the companies set to be involved in developing the offline solution.
Total development costs, comprising both externally and internally developed components are estimated to amount to €1.3 billion, whilst annual operating costs are projected to be around €320 million. The Eurosystem is continuing preparations in response to calls from euro area leaders to be ready for potential issuance as soon as possible. However, the necessary legislation has not yet been adopted. The work is therefore structured in modules to allow gradual scaling and to limit financial commitments.
The Eurosystem would bear the costs of the establishment of the digital euro scheme and infrastructure, just as it does for the production and issuance of euro banknotes. As with banknotes, these costs would be covered by “seigniorage” (the income the ECB earns from issuing money). This means that the costs of the digital euro would not be borne by the taxpayer. The ECB is committed to keeping costs low by reusing existing infrastructure as much as possible, while still delivering a digital euro that brings value to consumers and merchants.
The digital euro would be a public good. Its basic functions would therefore be free for consumers and entail relatively low costs for European merchants. The Eurosystem would not charge any fees for using the infrastructure.

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How much would the digital euro cost banks?
The digital euro would provide banks and PSPs with a completely new, independent, European infrastructure on which they can build. Providers can minimise their costs by using open digital euro standards for banks and PSPs’ own EU-wide services and by reusing existing processes for the digital euro (KYC, anti-money laundering, etc.). The Eurosystem remains committed to keeping costs low for all stakeholders through close cooperation with the market. The direct customer relationship would be maintained or could even be strengthened by the issuance of the digital euro.
Calculations of banks’ investment costs prior to the introduction of the digital euro are derived from published studies by the European Commission, the ECB and the European banking sector – based on a cost study conducted by PwC (see below).
The European Commission estimated the total cost of investment for euro area banks at between €2.8 billion and €5.4 billion in its 2023 impact assessment. The results of an ECB study published in October 2025 suggest that investment costs could lie within a range of €4 billion to €5.77 billion in total, or €1 billion to €1.44 billion annually over a four-year period. This therefore also confirms the overall plausibility of the Commission’s total investment cost estimate of €2.8 billion to €5.4 billion for euro area banks.

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A view on recent assessments of digital euro investment costs for the euro area banking sector

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