According to a representative survey conducted in 2025 on behalf of digital association Bitkom, about a quarter of Germans are open to the idea of purchasing cryptocurrencies, 8% already own some, and 4% plan to make a purchase. These results show that payment habits are increasingly shifting to the digital sphere. While cryptocurrencies are decentralized, states are pursuing their own concepts for digital, state-backed currencies. In the eurozone, the aim is for the digital euro to complement cash moving forward.

In this article, you’ll learn what the digital euro is, how it works, and what practical implications it has for businesses and customers in Germany. We’ll also dispel some of the most common misconceptions about the digital euro.

What’s in this article?

• What is the digital euro?
  
• How does the digital euro work?
  
• What are people in Germany saying about the digital euro?
  
• What are the practical implications of the digital euro for businesses in Germany?
  
• What are the practical implications of the digital euro for customers in Germany?
  
• Common misconceptions about the digital euro
  

What is the digital euro?

The digital euro is a planned digital version of the euro to be issued by the European Central bank (ECB). As a digital twin to cash, it’s intended to complement bank notes and coins and be available free of charge to both individuals and businesses as an electronic means of payment.

The ECB has been working on developing its digital currency for several years. A preparatory phase, launched in November 2023, concluded in October 2025. Since then, the ECB has continued its work on satisfying the technical requirements for the initial issuance and to support the legislative processes. Legal regulations for the digital euro are set to enter into force in 2026, with a pilot project scheduled to start in 2027. The Eurosystem could be fully operational and ready to issue the first digital euro by 2029.

Background on the introduction of the digital euro

Europeans’ payment habits are changing. The ECB’s SPACE 2024 study shows that digital transactions are on the rise, while people in Europe are paying with cash less and less often. Although cash remains the most common method of payment at brick-and-mortar retailers in the eurozone, its use is declining. In 2024, 52% of point-of-sale (POS) transactions were paid for in cash, down from 72% in 2019. As this transformation unfolds, there is a growing need for a public digital payment method that brings the benefits of the euro into the digital world. These benefits include ease of use, high levels of privacy, widespread acceptance, and reliability across the entire eurozone.

At the same time, there are strategic objectives behind the ECB’s introduction of the digital euro, with the central bank aiming to shore up Europe’s ability to pursue its own monetary policy. The digital euro is intended to strengthen European monetary sovereignty, and to reduce Europe’s dependence on non-European payment providers, thereby contributing to its economic stability and security. It’s also intended to encourage innovation in the payments sector. A state-backed digital means of payment can stimulate competition and help inspire new technological solutions. This could make the European payments market more efficient, resilient, and inclusive.

For businesses, the digital euro opens up new possibilities. It can simplify digital payment processes and make transactions more efficient. New use cases are emerging, particularly in ecommerce and automated payment workflows. The digital euro could also streamline processes in cross-border commerce within the eurozone. In addition, payments could be processed more directly in future, with the potential to reduce transaction fees.

What makes the digital euro different from other forms of money?

The digital euro is a direct liability guaranteed by the ECB. Its purchase power is pegged to the euro on a one-to-one basis. This is a key difference between the eurozone’s digital currency and other forms of money, such as bank deposits, cryptocurrencies, or stablecoins.

• Bank deposits are liabilities held by commercial banks. Payments made using bank balances are usually handled via accounts held with banks or payment providers. Unlike the digital euro, bank balances are based on the reserves the bank creates, rather than on the central bank reserves.

• Cryptocurrencies, such as Bitcoin or Ethereum, are decentralized, are not subject to government regulation, and exhibit high price volatility. They do not constitute legal tender and are not guaranteed by a central bank. The digital euro, on the other hand, is centrally controlled, has a stable value, and is legally recognized.

• Stablecoins are digital assets issued by private providers. Their value is typically pegged to traditional currencies. They can facilitate fast cross-border payments, but are subject to regulatory and liquidity risks. The digital euro aims to mitigate these risks, as it is government-backed and embedded within a regulated financial system.

How does the digital euro work?

The digital euro is intended to be available to individuals, businesses, and public institutions in the eurozone. To qualify, users must have a residence or place of business in an EU member state or be temporarily staying there. Entities outside of the eurozone could also gain access under certain conditions. However, this would require contractual agreements between the EU and the relevant third country, as well as corresponding agreements among the participating central banks.

Setting up a digital wallet

The digital euro will not be managed directly through accounts held with the central bank. Instead, users can set up a digital wallet with an intermediary, such as a commercial bank or other regulated payment provider. These providers will be subject to oversight by the relevant authorities and will comply with a unified set of Eurosystem regulations. Businesses can integrate the digital euro into their existing banking arrangements and payment processes. The Eurosystem defines common standards for these integrations, to ensure a consistent level of service across the entire eurozone.

Loading a wallet and initiating payment

To make a payment using the digital euro, users load funds into their wallet, either through a connected reference bank account or by depositing cash. The funds are then immediately available to use.

Payment is initiated digitally, via smartphone or card, for example. Transactions are executed immediately. Payments should be possible in real time in brick-and-mortar stores, online, and between private individuals. It won’t matter which eurozone country the payer and payee are located in, or which payment service provider (PSP) they’re using.

Online and offline capability

The ECB's digital currency is intended to be usable both online and offline. For online payments, the transaction will be processed via a connection to the system, just like any other electronic payment process.

For offline payments, the plan is that it will be possible to transfer money directly between two devices. This enables payments even when there is no internet connection or the connection is unstable. The only people who will have access to the transaction data from these offline payments will be the payer and the payee. The protection of personal payment information would thus be similar to that of cash.

Integration into existing systems

The digital euro is designed to integrate into the EU’s existing payments infrastructure, with plans to connect it to established SEPA processes. Businesses will therefore be able to integrate it into their existing POS, enterprise resource planning (ERP), and ecommerce systems.

The Eurosystem will establish a common set of standards and technical specifications. This will allow providers to plan with greater confidence, and will ensure that basic functions are identical across all eurozone countries.

Data protection and anti-money laundering (AML)

The digital euro has to balance two competing requirements: protecting people’s privacy and complying with legal regulations. The system is designed to limit the use of personal data to the extent strictly necessary. The ECB should not be able to view individual payment profiles.

At the same time, the EU already has regulations aimed at combatting money laundering and terrorist financing. PSPs must therefore run identity checks and report suspicious transactions. The digital euro thus combines data-minimizing technology with regulatory oversight.

What are people in Germany saying about the digital euro?

The market environment the digital euro will be entering in Germany is somewhat unique. Customers traditionally value their data protection and getting to choose what happens to their data. At the same time, the girocard is the dominant method of payment at brick-and-mortar retailers. However, the 2024 introduction of Wero, an EU-wide digital wallet and payment system, is an indication of how payments are changing, becoming more digital, pan-European, and competitive. The digital euro will slot into and complement this existing system moving forward.

Awareness and intention to use

According to the EHI Online Payment 2025 study, payment on invoice, direct debit payment, and credit and debit card payment are particularly popular choices in Germany. In brick-and-mortar retail, nearly two-thirds of sales are paid for by card, and one-third in cash. That said, lots of people in Germany are clearly open to the idea of the digital euro. Around half of respondents interviewed in a representative survey conducted in 2024 on behalf of the Deutsche Bundesbank (the central bank of Germany) indicated that they could see themselves using the digital euro as an additional payment option. However, at the time of the survey, only 41% of respondents had actually heard of the digital euro.

Data protection expectations

More than three-quarters of those surveyed said that privacy was important or very important to them. For that reason, 59% also supported the planned offline version of the digital currency, which will offer a similar level of data protection to cash. According to the ECB, the digital euro will be designed to guarantee the highest possible level of security and privacy protection. It’s intended to comply with the strict standards of the EU, which is known for its particularly stringent security and data protection laws. It should not be possible to identify individuals based on their payments.

European sovereignty

Many people in Germany care greatly about European sovereignty. Nearly three-quarters of respondents supported basing the digital euro on a European infrastructure so that it can function independently of non-European providers. The digital euro is seen as a state-backed, European currency. This attribute improves people’s trust in its stability and reliability.

What are the practical implications of the digital euro for businesses in Germany?

The introduction of the digital euro will lead to a structural expansion of the payments sector in Germany and the eurozone. For businesses, then, it’s not a matter of replacing existing processes—it’s about integrating an additional payment option. This will involve both technical processes and strategic decisions.

Acceptance at POS and in online retail

German businesses should be capable of accepting the digital euro in both brick-and-mortar establishments and ecommerce settings. At the point of sale, acceptance is expected to take place via existing card terminals. In many cases, software updates should be enough to be able to process payments in digital euros. As things currently stand, new hardware will only be necessary when older devices fail to meet technical requirements.

In ecommerce, businesses in Germany can integrate the digital currency into their existing checkout processes. Customers can then select this option like they would any other form of payment. Payments will be settled in real time, with merchants receiving payment confirmation instantly.

Technical integration and interoperability

The digital euro is intended to be interoperable with existing payment systems. It will be integrated into the European SEPA infrastructure. Businesses will therefore be able to integrate it into their existing POS, ERP, and accounting systems.

Stripe Payments enables merchants to integrate new payment methods without fundamentally altering their system. Stripe Payments currently supports over 125 payment methods, as well as international payment options across 195 countries and more than 135 currencies. As soon as the digital euro becomes available, it’ll be possible to integrate it into the existing Payments infrastructure, allowing businesses to accept it just like any other digital payment method.

Settlement and liquidity

Transactions in digital euros are intended to be executed in real time. This shortens settlement cycles and ensures that payments are received promptly, making it easier for businesses in Germany to plan their liquidity. What the billing processes will look like in practice depends on the final technical architecture, but potential options include daily or even instant crediting.

Handling digital euros on the books

From an accounting perspective, the digital euro is equivalent to standard central bank money. Businesses in Germany therefore post incoming payments like any other euro payment. However, some internal processes might need to be adjusted. Finance departments will have to define how wallet balances are reported and monitored. Internal policies around access management and compliance will also have to be established.

Cost structure and competition

One of the key objectives behind the digital euro is to make the payments sector more competitive. In the long term, this could lead to cost benefits for merchants. With payments being processed more directly and fewer intermediaries involved, transaction fees could potentially decrease.

At the same time, this creates additional competition among PSPs. Providers such as Stripe can combine the digital euro with additional services, such as fraud prevention or automated billing, giving businesses a wider range of payment options along with a standardized infrastructure.

What are the practical implications of the digital euro for customers in Germany?

The digital euro has direct practical implications for private users. Below are some of the most important ones.

Versatility of use

Customers can keep digital euros in a wallet opened with a bank or a regulated PSP. The balance is available any time and is pegged to the euro. Users can then make payments online, in stores, or directly to other private individuals.

Instant access to funds

Unlike traditional bank transfers, which can take longer to process depending on the bank and the day of the week, recipients of digital euro payments receive their funds instantly. Private users of this new digital currency will therefore enjoy quicker settlement and better control over their finances.

Security aspects and payment limits

Based on the ECB’s plans, the digital euro is designed to be extremely secure. Wallets are subject to strict regulatory requirements, and identity checks are in place to prevent fraud and money laundering. Payment limits can be set to enhance security. This will allow users to maintain full control over their funds.

Protection if a bank collapses

Since digital euro balances are direct liabilities of the central bank, they are protected independently of the payment provider bank. If a bank should fail, users’ balances remain securely accessible. In this respect, the digital euro differs in its legal structure from traditional bank deposits.

Common misconceptions about the digital euro

The introduction of the digital euro will open up new possibilities in the payments sector, but it also comes with uncertainty and unanswered questions. Below, we clear up the most common misconceptions.

Cash is not being replaced

A widespread misconception is that the digital euro is intended to replace cash. Actually, both the European Central Bank and the Deutsche Bundesbank stress that digital central bank money and cash will coexist. “Cash is a core product of the Bundesbank and other central banks in the Eurosystem,” explained Burkhard Balz, a member of the Deutsche Bundesbank’s executive board. “We will not abolish cash.”

The digital euro is not a cryptocurrency

Unlike classic cryptocurrencies, the digital euro is managed centrally by the ECB and is legally recognized tender. It has a stable purchasing power, is guaranteed by the state, and is subject to the same regulations as conventional central bank money.

Merchants are not required to accept the digital euro

According to the current plan, merchants will not be obligated to accept the digital euro as a payment method. They can offer it as an additional payment option, but they won’t have to replace any existing payment methods to do so. Integration is voluntary and, similar to other payment services, can be implemented easily using proven infrastructure such as Stripe Payments.