European Central Bank briefs Eurogroup on digital euro progress and planned safeguards such as holding limits

The European Central Bank published a state-of-play update for the Eurogroup on the digital euro, linking the project to the declining role of cash and growing dependence on non-European payment solutions. It cited its latest survey on payment attitudes in the euro area showing cash falling to 40% of day-to-day payments in 2024 from 68% in 2019, while cards are the most popular and mobile solutions are rapidly gaining popularity, alongside increased traction for stablecoins. The update describes work under a “pioneers” scope focused on technical testing and conditional payments, and a “visionaries” scope exploring innovative use cases such as integrating receipts in a payment app. It also flags stakeholder outreach including a workshop on the future of business-to-business payments, an open forum on additional use cases beyond the current project scope, and strong interest in an experimentation exercise with 93 applications. On design, the ECB reiterates that a digital euro would be integrated with existing European payment solutions and include safeguards to preserve financial stability, including holding limits, with methodology being developed with stakeholders; preliminary results point to contained liquidity and profitability risks, and the ECB notes that digital euro holdings could help offset a decline in seigniorage associated with reduced cash use. The ECB states the project is on track and is addressing technical questions to facilitate legislative discussions, and it points to supporting materials including an updated digital euro FAQ, a progress report, and an ECB opinion on the European Commission’s legislative proposal on the digital euro.