The digital euro is neither science fiction nor a passing fad. It is a reality in construction that could redefine how you pay, get paid and manage your business. The debate is open: risk or complement?
As the European Central Bank (ECB) moves steadily towards this form of digital public money, it is worth analyzing what implications it will have for all of us.
What is (and what is not) the Digital Euro?
The digital euro is an initiative by the ECB to offer an electronic version of the euro, supported by the institution and designed to coexist with cash. It will be the digital version of the bills and coins that you carry in your pocket, but without the need to physically carry them.
The ECB assures that it would be risk-free and respect privacy and data protection, since it is directly supported by the central institution. Unlike cryptocurrencies, the digital euro does not seek to replace physical money or generate speculative volatility.
What is it?
- A central bank digital currency (CBDC)
- A complement to cash, not a substitute
- A free payment method for citizens
- Usable both online and offline
- Centralized control that guarantees stability
What is it NOT?
- It is not a speculative cryptocurrency
- It is not a replacement for cash
- It is not an investment instrument
- It is not a mass surveillance tool
- It is not programmable money with usage restrictions
Comparison: Physical Euro vs. Digital Euro vs. Cryptocurrencies
The reasons behind the project
The ECB seeks to “ensure sovereignty over payments in Europe and offer an alternative to unregulated private currencies,” such as stablecoins or cryptocurrencies. The growing digitalization of our economy and the rise of private payment methods make it necessary for central banks to adapt so as not to lose relevance.
Additionally, the project seeks:
- Preserve European monetary sovereignty against foreign initiatives such as Chinese digital currencies or private stablecoins.
- Promote financial inclusion for those with limited access to banking services.
- Reduce dependence on foreign digital payment providers.
- Serve as a more efficient monetary policy tool.
Global Context: We are not alone
Currently, some 120 central banks around the world are working on digital versions of their national currency. China leads the way with its digital yuan already in circulation, while other countries such as Bahamas, Jamaica and Nigeria have already launched their own CBDCs.
The United States, for its part, maintains a different stance, favoring private stablecoins instead of an official CBDC, which marks an important strategic difference with Europe.
When will the Digital Euro arrive?
Contrary to what some claim, the digital euro will not enter circulation in October 2025. This date marks the end of the “preparation phase” of the project, at which point the Governing Council of the ECB will decide whether to proceed with the next stage of development.
The ECB Governing Council could make a decision on the launch in October 2025, but this does not mean that it will immediately start circulating. Furthermore, any implementation depends on the approval of the necessary legal framework by the European Parliament and the Member States.
Digital Euro Timeline
Impact on Cash and Traditional Banking
According to ECB estimates, for every 10 digital euros issued, 5 physical euros would be withdrawn from circulation. This raises the question: is the digital euro a threat or an evolution of cash?
One of the biggest concerns is that “citizens could choose to store their money directly at the ECB instead of in commercial banks,” which could lead to a massive flight of deposits. To mitigate this risk, it is planned to establish limits on the amounts that can be held in digital euros.
Although the European Union you have proposed to limit of 3,000 euros for individual holdings, some banks initially pushed for a much lower limit of just 60 euros, which reflects the concern of the traditional banking sector regarding this innovation.
To avoid bank liquidity problems, the ECB is considering a solution known as “reverse overflow”, where any amount exceeding the set limit would be automatically transferred to a linked bank account.
The citizens' perspective
A recent study reveals that 61% of Spaniards would not adopt the digital euro, mainly due to lack of knowledge and satisfaction with the available digital payment methods. However, perception could change with more information and education about its benefits.
Among those willing to use it:
- 50% would use it mainly for online commerce
- 40% for payments in physical environment
- 33% for transfers between people
- 48% for international remittances
Retail and point of sale: Opportunities for commerce
The perception is notably more positive among businesses, with 85% willing to accept it, especially valuing the speed and security in payment reconciliation. For the retail sector, the digital euro offers:
- Faster, frictionless payments: Instant transactions that improve customer experience.
- Greater operational resilience: less dependence on private payment providers.
- Cost reduction: one of the objectives of the digital euro is "that its acceptance by merchants is cheaper than with other digital payment methods."
New payment solutions are already evolving towards unified experiences. For example, some fintechs offer applications that combine “payment by terminal (POS) and payment by smartphone (SoftPOS)” in a single solution, anticipating integration with future systems such as the digital euro.
Practical use cases in retail
- Efficient micropayments: small amount transactions without prohibitive fees.
- Scheduled Payments: Automated subscriptions and recurring payments.
- Mobile Commerce – Seamless integration with shopping apps.
- Omnichannel: consistent experience between physical and digital channels.
- Cross-border interoperability: frictionless payments across Europe.
«At Imagina, we see an opportunity to connect these new payment methods with existing environments, integrating the digital euro into smart cash management and POS systems to create a unified ecosystem» – Javier Ferrando Rovira CEO at Imagina ITS
Privacy and regulation: The necessary balance
The ECB has established that "the processing of personal data must be based on the use of the most advanced security and privacy protection measures, such as pseudonymization or encryption", seeking a balance between security and privacy.
In offline payments with digital euros, “only the payer and the beneficiary would know the personal data”, offering a level of privacy similar to cash for everyday transactions.
However, it is important to highlight that:
- The digital euro will not be completely anonymous like cash.
- Larger transactions will be subject to controls to prevent money laundering.
- It will not be a surveillance tool, but it will be regulated to ensure security.
In February 2025, an ECB representative promised that the digital euro will have a “higher privacy standard than currently offered by commercial solutions,” seeking to positively differentiate itself from private alternatives.
The role of fintech innovation
The digital euro “represents a commercial opportunity, in particular for FinTechs”, whose users “could benefit from these innovative services”. The European fintech ecosystem sees the digital euro as a platform on which to build new solutions that take advantage of this public infrastructure.
This digital currency would open new opportunities for the creation of innovative financial products and services, where fintech companies, banks and developers could take advantage of its infrastructure to offer more efficient solutions. – Investing.com
Conclusion: A Necessary Duality
The digital euro does not come to eliminate cash, we believe that it must adapt to a more digital world where European monetary sovereignty faces new challenges. It is not a question of «or one or the other», but of complementarity and options for consumers and companies.
The path towards its implementation will be gradual and will be marked by important debates on privacy, holding limits and their impact on the financial system. What is undeniable is that it represents a decisive step towards the modernization of our monetary system.
At Imagina, we believe in the coexistence of models: smart cash and efficient digital payments. The key is interoperability and freedom of choice for the consumer.
Can you imagine a payment system where cash, the digital euro and your POS are understood without friction? We are already working to make it a reality.