The European Council agreed its negotiating position on draft EU regulations that would create the legal framework for a potential digital euro and clarify and strengthen the legal tender status of euro cash, with the aim of ensuring wide acceptance and availability of cash alongside a new form of public money. On the digital euro, the Council position confirms it would complement cash, be backed by the European Central Bank (ECB), and be usable online or offline with a high degree of privacy. It introduces safeguards to limit use as a store of value by providing for holding limits on digital euro balances, with amounts set by the ECB within an overall ceiling agreed by the Council and reviewed at least every two years. Payment service providers would be prohibited from charging consumers for certain mandatory services, while allowing fees for added-value services, and the text sets expectations for access to mobile device hardware and software to support fair access for digital euro interfaces. A compensation framework would cap interchange and merchant service charges during a transitional period of at least five years based on fees for comparable payment methods, with later caps to be based on the actual costs of providing the digital euro. On cash, the Council position supports an effective ban on retailers’ or service providers’ refusal to accept euro banknotes and coins, subject to limited exceptions including distance purchases such as online sales and unmanned points of sale, while permitting businesses to indicate a preference for non-cash payment methods. Member states would be required to monitor cash acceptance and access using common and national indicators, take remedial measures where needed, and establish cash resilience plans or measures for widespread and severe disruptions to electronic payments. The Council can now enter negotiations with the European Parliament, and if the digital euro framework is adopted, the decision on whether to issue a digital euro would ultimately rest with the ECB, which has indicated it could be operational by 2029.
European Council 2025-12-19
European Council agrees negotiating position on digital euro legislation and stronger legal tender rules for euro cash
The European Council has agreed on its negotiating position for draft EU regulations to establish a legal framework for a potential digital euro and reinforce the legal tender status of euro cash. The digital euro would complement cash, be backed by the European Central Bank (ECB), and include privacy safeguards and holding limits. The Council also supports measures to ensure cash acceptance, with the ECB deciding on the issuance of a digital euro, potentially operational by 2029.