A digital euro represents central bank money in digital form, akin to physical cash, designed for use in retail payments by citizens and businesses. As a central bank digital currency (CBDC), it complements traditional banknotes and coins. The surge in digital financial services motivates the development of CBDCs, addressing the decline in cash transactions and the rise of digital payments. The digital euro also responds to challenges posed by private currencies like Bitcoin and seeks to ensure Europe’s ‘strategic autonomy’ in the face of external dependence on foreign payment services. The ECB initiated the investigation phase for the digital euro in October 2021, with the European Commission proposing a digital euro package to establish a legal framework. While the proposal grants legal tender status to the digital euro, it also ensures the legal tender status of physical central bank money in secondary legislation, emphasizing its significance in the evolving financial landscape.
HomeDIGITAL ASSETS REGULATORYstablecoin euThe Digital Euro Package: Advancing the European Union's Digital Currency Initiative