Key facts

1. The evolution of money: The digital euro would represent the next step in the evolution of cash for the digital world, much like banknotes once evolved from coins centuries ago.
    
2. Making everyday life easier: The digital euro would provide a new payment method that could be used in most payment situations and throughout the euro area. Its universal acceptance would make day-to-day payments easier for consumers.
    
3. Greater resilience: Everyday payment services are essential to people and the economy, much like electricity or water. People expect public institutions to ensure that these services remain available to everyone and that no one is left behind. The digital euro would help reduce Europe’s dependence on non-European payment solutions.

Comparing apples and oranges: Developments in crypto assets are not relevant to the digital euro. The confusion arises because the term “digital currencies” is often used to talk about both crypto assets, such as bitcoin, and the digital euro.

In reality, they have nothing to do with one another. Bitcoin is not a currency because it does not serve as a medium of exchange or a unit of account. Instead, it serves as a speculative asset.

The digital euro, by contrast, is a liability of the central bank.

People who wish to speculate in crypto assets would still be free to do so under the applicable legal framework, regardless of whether a digital euro is introduced.
 

An additional payment method: The digital euro would not only complement cash but also existing private electronic payment solutions. In a dynamic and growing market, the digital euro and private Europe-wide payment solutions can complement one another. Both can help make instant payments more widely available. Investments that banks have made in their IT systems to comply with the Instant Payments Regulation would also pay off for the digital euro. After all, both solutions require payments to be processed in real time.

At the same time, the digital euro would address additional structural weaknesses in the European payments landscape, which could not be remedied through the EU’s Instant Payments Regulation alone.

Furthermore, the standards introduced for the digital euro could facilitate the development of euro area-wide retail payment solutions based on instant payments. This would help reduce Europe’s dependence on non-European providers, which currently handle the vast majority of point-of-sale payments and e-commerce payments across the euro area.
 

1. One payment solution for every occasion, available anytime: There is currently no European digital payment method that is accepted throughout the entire euro area. While euro cash has provided a common means of payment since 2002, an equivalent solution for digital payments does not yet exist.
    
2. A payment solution with cash-like features: The digital euro could be used in situations where cash cannot be used, such as e-commerce payments or remote payments between two individuals. In all these situations, it would retain the key features people value about cash: strong privacy protection, free basic services, offline functionality and ease of use.
    
3. A payment method designed with privacy in mind: For offline payments in digital euro, personal transaction details would only be known to the person making the payment and the person receiving it. For online payments, personal data would not be passed on to third parties, unless such data are required by European law to prevent illegal activities. Accordingly, through the use of privacy-enhancing technologies, the ECB would not be able to identify users based on their payment transactions.
    
4. A payment solution that leaves no one behind: As a public good, the digital euro would be designed to ensure that payments are accessible to everyone and that no one is left behind. The ECB would provide an easy-to-use app available in all euro area languages and equipped with accessibility features for people with disabilities. Physical payment cards would also be available through supervised payment service providers for users without a mobile device. Finally, the proposed legislation provides for personal assistance to help people get started with using the digital euro.
    

1. More efficient payments: The digital euro would be a payment solution that works across the entire euro area. This could make things simpler for retailers, as they would no longer need to navigate today’s fragmented payments landscape. Furthermore, the availability of a public payment option could help maintain pressure to keep the payments market cost-effective, particularly for small and medium-sized companies. Lower costs could ultimately benefit end consumers as well.
    
2. Easy payments: Customers are less likely to abandon an online purchase during the checkout process if they are familiar with the payment method being offered. This is particularly important in e-commerce.
    
3. Instant payment receipt: With the digital euro, retailers could receive the money in their account immediately and at no extra cost.
    

1. A platform for innovation: Banks and other payment service providers would be able to preserve their relationships with end users and remain their providers of choice. While private-sector innovations today mainly cater to national markets, the digital euro would offer seamless reach throughout the euro area. In addition, digital euro standards could promote the further development and wider adoption of instant payment solutions, including in situations where they are currently under-represented, such as point-of-sale payments.
    
2. A neutral compensation model: According to the compensation model set out in the legislative proposal, payment service providers would receive compensation for digital euro transactions comparable to that received for transactions made using private payment solutions. Payment service providers would also be able to offer a wide range of additional and innovative services built on or complementary to the digital euro, going beyond the basic services provided to consumers at no cost.
    

Retaining seigniorage, that is, income earned on banknotes in circulation: If demand for cash as a store of value were to decrease in the future, governments would still have an interest in maintaining seigniorage income.

How is seigniorage income generated? Commercial banks are responsible for distributing euro banknotes to people across the euro area. They purchase the banknotes from central banks at face value. To do so, banks either borrow funds from their respective central bank or provide assets as collateral. The central bank then earns interest on the money it lends, or receives a return on the acquired assets, thus generating seigniorage income.

The level of seigniorage income will depend on the amount of digital euro held by the public. Given the objective of minimising effects on banks’ profit margins, the impact on seigniorage income is expected to be limited too. In practice, it will depend on: (1) the level of adoption of the digital euro, (2) whether banks will pay interest on deposit accounts/digital euro balances, (4) holding limits for digital euro balances, and (5) users’ preference for holding digital euro versus paying directly from their bank account.
 

1. Easy access for everyone: Everyone in the euro area should be able to easily access and use the digital euro for payments, no matter which bank they use or in which member state they live. Getting access to the digital euro should be as simple as obtaining euro banknotes.
    
2. Broad acceptance: Citizens will expect to be able to pay with the digital euro just as easily as they do with cash today. Retailers that accept digital payment methods should therefore also accept the digital euro. The same applies to e-commerce, which currently accepts only private payment methods rather than cash.
    
3. Available through your own bank: Citizens will also expect to obtain the digital euro through their bank, just as they do with cash today. Users who wish to access the digital euro should not face any obstacles. They should not have to switch banks in order to be able to use it.
    

Users can hold one or more digital euro accounts, including accounts used for business activities. Joint accounts with another person, such as a family member or relative, would also be possible alongside individual accounts. The number of accounts held would be determined entirely by the user and could be changed at any time.

For mobile payments, users could use their payment service providers’ mobile apps to make and receive payments, just as they can today. In addition, the ECB could also offer its own digital euro app, which users would be free to choose instead.

For smaller transactions conducted between devices that are physically close to one another, mobile payments in digital euro would also be possible without an internet connection. To store digital euro securely, users could rely on the EU Digital Identity Wallet, which was proposed by the European Commission to facilitate access for individuals and businesses to both public and private online services.
 

1. Free basic services for end users: The proposed compensation model follows a balanced approach. Citizens would be able to use basic services such as spending, holding, or receiving digital euro free of charge. At the same time, economic incentives would be created for retailers accepting the digital euro and for payment service providers, such as banks, distributing it.
    
2. Opportunities for payment service providers: Payment service providers could generate revenue in particular by offering services that go beyond the basic features, such as innovative add-on services or optional payment solutions. In addition, they would earn indirect revenue through regulated merchant service charges and inter-PSP fees. However, these fees would be capped and subject to strict regulation.
    
3. The role of the Eurosystem: The Eurosystem would bear the costs of building and running the digital euro’s core infrastructure, just as it currently bears the costs of issuing euro cash. Payment service providers would not have to pay direct participation fees.
    
4. Regulated pricing and safeguards: Pricing would not be determined solely by market dynamics, but will be guided by regulatory requirements. These would include, in particular, fee caps designed to ensure that retailers are not charged more than they are for comparable payment methods and that they are generally protected against excessive costs.
    

The digital euro ecosystem would be protected by a comprehensive cyber resilience framework, comparable to the one already in place for the existing TARGET services.

TARGET services are developed and operated by the Eurosystem. They ensure the free flow of cash, securities and collateral across Europe. Acting as a protective shield, the framework would ensure that everyone involved has the necessary safeguards and procedures in place to minimise cyber risks and continuously monitor emerging threats.

In addition, the digital euro would be built using state-of-the-art technologies designed to provide a future-proof system that is resilient to cyber attacks.
 

The digital euro would never become programmable money. This is explicitly ruled out in the respective legal provisions. The Eurosystem would never impose restrictions on where, when, or for what purpose people may spend their digital euro.

Programmable money is essentially equivalent to a voucher with predefined restrictions. However, the Eurosystem is responsible for issuing money, not vouchers.