The launch of the next phase of the digital euro project | Fieldfisher
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The launch of the next phase of the digital euro project



Following our previous discussion on the digital euro project, the Governing Council of the European Central Bank decided recently to move to the next phase, the preparation phase.

The preparation phase, which commenced on 1 November 2023, aims to further develop and test the digital euro. During this phase, it is envisaged that the digital euro rulebook will be finalised. The rulebook will set out rules, practices and standards. Testing will also be carried out throughout the preparation phase in terms of design, user experience, privacy, financial inclusion and ecological footprint.

It is foreseen that the digital euro will co-exist with cash, allowing consumers a choice of payment method in a rapidly evolving digital world. The digital euro will be accessible to people, businesses and public entities that reside or are established in a euro area Member State on a temporary or permanent basis. It is expected that it will be free for basic use for individuals, via a mobile app or a physical card and can be used for all digital payments throughout the euro area, allowing consumers to make instant secure payments in physical and online stores and between individuals.  

It is proposed that the digital euro will be designed to be inclusive and accessible, taking into consideration those with low digital and financial skills, as well as people with disabilities and the elderly. Individuals will be able to set up a digital euro account at any commercial bank or any other payment service provider.

Whilst there are concerns surrounding privacy and data protection, individuals are assured that the digital euro will make data protection a priority. In this regard, when paying online, Banks would only have access to personal data required to carry out payments and prevent fraud and combat money laundering, which is similar to other digital payment methods such as credit card payments. As for offline payments, Banks would only have access to the same data as when a consumer withdraws cash from an ATM.

In the context of environmental concerns, while the production of payment instruments and infrastructures are not always energy efficient, the design of the digital euro aims to focus on technological solutions that minimise its ecological footprint.

There is a concern for Banks that the digital euro will attract away from cash which could affect a Bank’s ability to lend money. However, the President of the European Central Bank has assured that physical cash is here to stay and will simply co-exist alongside the digital euro.


It is anticipated that this next phase will take two years and we will closely watch any significant developments during this period. The legislative process for the digital euro will run in tandem with the preparation phase. In this regard, the European Commission published its legislative proposal for the establishment of a legal framework for the digital euro.

It remains to be seen how the digital euro will operate and while the digital euro will no doubt allow the European Central Bank maintain its role in payments in a digital world, it will need to carefully monitor financial stability in order to avoid any adverse impact into the future.

Written by:  Clodagh Morrissey and Ghezal Wassiee

Areas of Expertise

Public and Regulatory