This method of payment may represent an important step towards a more modern financial infrastructure, but it also raises questions about the impact on the banking sector and privacy protection.

On 30 October 2025, the European Central Bank took the digital euro project to the next stage. This follows the preparatory phase launched by the Eurosystem in November 2023.

"The Governing Council has decided to postpone the project to the second preparatory phase, when we expect the adoption of legislation, the final selection of all suppliers of system components and the launch of pilot testing of selected entities," says Dušan Jurčák, executive director of the National Bank of Slovakia's payment systems and cash department.

Thus, blocking the development is not expected and the technical platform is being built to make the system ready for practical implementation in case the legislation gives the green light. The regulator outlined how the digital euro could work in everyday life at an informal meeting with the media on Thursday.

The nature and function of the digital euro

This is not news. While the preparatory phase of the project, which the Standard reported on two years ago, focused on testing the conceptual and technical possibilities of the digital euro, the new one concentrates on the technical readiness of the system to enable the release of its first version.

If European lawmakers approve the necessary legislation during 2026, pilot operations could begin in 2027, with full deployment expected around 2029.

The digital euro is intended to be a digital form of cash - universally usable within the euro area, available for all current payments and with no basic usage fees. It is intended to allow users to make payments both online and offline, with a high level of privacy protection and instant settlement of transactions in central bank money.

Merchants will not pay fees to card companies, which should reduce their costs. "As you download different mobile apps today, in the future you will download a digital euro app. It will enable account-to-account payments between individuals, at merchants and in e-commerce," says Rudolf Pataki, head of payment systems strategy.

The main tool will be the ECB's mobile app, which will be used by commercial banks - who will also maintain users' accounts. "The ECB will create the mobile app, but the accounts will be maintained by the commercial banks," he explains.

The aim, according to the central bank, is for the digital euro to complement cash and existing electronic solutions, not replace them. It should be usable for person-to-person payments, bricks-and-mortar establishments, e-commerce and government payments.

Whether it is residents, merchants or central banks, the regulator believes they should benefit from the project. However, commercial banks as payment service providers may lose out, as the basic digital euro account will be free of charge.

At the same time, the funds transferred from the current account will become a liability of the central bank, which will reduce the ability of banks to provide credit. "Every euro you move from your current account to the digital euro account is no longer a liability of the commercial bank, so it may affect the amount of their profit," Jurčák warns.

It is precisely to preserve the stability of banks that two crucial safeguards are to be set up: digital euro accounts will not bear interest and a maximum limit will be set on each user's account. "Even a limit of several thousand would not threaten the stability of the banks," says the central bank expert, adding that this has been confirmed by surveys so far.

Strategic importance and European sovereignty

From the point of view of both the European regulator and national central banks, this is a project that strengthens the strategic autonomy and resilience of the European payments system. The aim is to create an infrastructure managed by public institutions - not private companies - thereby reducing dependence on non-European payment platforms.

According to the NBS and the ECB, the project does not envisage central banks having access to personal data on specific transactions. These banks will not hold information that could directly identify users.

The possibility of an anonymous or pseudonymous transaction is also to be retained, in particular in the offline mode, where the payment is made directly between the payer and the payee without third party intermediation.

However, the legislative process remains a key factor for the further development of the project.

The digital euro: relevance and reservations

For euro area members the digital euro project is an opportunity to participate in an infrastructure that could strengthen the security, sovereignty and efficiency of payments within the European Union. At the same time, the digital euro could reduce the country's dependence on non-European payment platforms, thereby strengthening the system's resilience to cyber threats.

For consumers, it would deliver fast, secure and fee-free payments - both online and offline - guaranteed by a central bank. Businesses would in turn benefit from a single settlement instrument across the euro area, reducing transaction costs and improving the predictability of cross-border payments.

Greater accessibility of digital payments for groups that today make limited use of banking services could also be an important benefit.

At the same time, however, the project also carries risks. In addition to the threat to banks' lending resources, the debate also touches on issues of privacy and the degree of centralisation. Critics point out that digital transactions cannot be completely anonymised and that central banks could influence the use of digital resources in emergency situations.

Economist Dominik Stroukal points out that opposition to the digital euro may not be based on conspiracy theories. While central bank digital currencies (CBDCs) have rational goals - such as enabling the use of "central bank money" even where cash is disappearing - they also carry legitimate risks.

The problem, he argues, is that CBDCs can never guarantee anonymity like cash and can undermine private banks, reducing competition and service quality. Stroukal stresses that there should be a substantive debate about these real risks, not conspiracies about "programmable money" that contradict reality and only distract from the real problems of the project.

However, the European Central Bank and the National Bank of Slovakia have repeatedly stressed that they will not have access to users' personal data and that offline payments will maintain a high degree of anonymity.

For euro area members the digital euro thus represents an opportunity to modernise the payments environment, but also a commitment to ensure that its benefits are realised without jeopardising the stability of the banking sector and the protection of privacy.