The EU Council endorsed its negotiating position on the digital euro, supporting a hybrid model that combines online and offline payments. The initiative is framed as a secure, universally accessible complement to cash and a lever to strengthen European monetary sovereignty.
Hybrid architecture, privacy, and the policy timeline
The Council-backed approach pairs an online system with a privacy-centric offline mode designed for resilience and cash-like use. Offline functionality is described as enabling payments without an internet connection while keeping transaction data local to the devices involved. In this design, transaction records remain confined to the payer and the recipient, aiming to mirror cash-style privacy and reduce third-party tracking exposure.
The online component is positioned to support broader digital-payment use cases and real-time processing via a central bank ledger or authorized intermediaries. The online rail is intended to extend functionality beyond offline use while preserving a controlled settlement model through the central bank or permitted service providers.
With the Council’s endorsement, negotiations with the European Parliament now begin, moving the project from internal alignment into formal legislative shaping. The text states that the ECB has completed technical preparations and that lawmakers are expected to finalize the legal framework in early 2026. The implementation cadence described is staged: a pilot program is scheduled for 2027, with potential issuance targeted for 2029.
For corporate treasuries and institutional counterparties, the hybrid structure implies changes to payment operations and resilience planning. Real-time online settlement could compress payment cycles and alter cash-management routines, while offline capability improves continuity when connectivity is intermittent. Strategically, the project is described as augmenting existing rails rather than replacing cash, with an explicit aim to reduce reliance on non-European payment providers.
For traders and market operators, the relevant watchpoints are settlement certainty and liquidity timing if central-bank-level settlement becomes more common. Integration choices between a central ledger and intermediaries are presented as the determinant of custody models, settlement finality, and counterparty exposure.