The European Central Bank has released new technical details on the digital euro project, providing the clearest picture to date of how the future currency may function across the euro area. The information appears in a restricted technical annex published alongside an exchange of views with the European Parliament’s ECON committee on 17 November 2025. The document outlines how the digital euro could strengthen Europe’s payment independence while offering new privacy and cost benefits to users and merchants.
The annex notes that nearly two thirds of card transactions in the euro area rely on non European providers, leaving many countries fully dependent on global card schemes. According to the ECB, this creates vulnerabilities in times of crisis when private solutions may be inaccessible or disrupted. The digital euro would help establish a Europe wide acceptance layer that works across borders and reduces fragmentation.
Merchant fees and competitiveness
A key part of the document focuses on the digital euro compensation model. The European Commission’s draft regulation proposes capping merchant fees to prevent excessive charges, while guaranteeing adequate compensation for banks and payment providers that distribute the digital euro. The ECB compares these potential fees with existing ones for international card schemes, where small merchants can pay significantly more than large retailers. By contrast, the digital euro’s capped structure aims to cut costs for small businesses and promote fairer competition.
The annex also highlights potential savings for merchants because the digital euro would not include scheme fees. As a result, the cost distribution between banks and merchants could improve compared with current foreign card networks. Larger merchants would still be able to negotiate lower fees within the capped framework.
Privacy commitments and offline payments
Privacy features receive significant attention. For online payments, the ECB states that only minimal data would be processed at infrastructure level and that the Eurosystem would have access only to pseudonymised information. Payment providers would handle identity verification for compliance purposes. Before final implementation, the ECB plans to consult the European Data Protection Supervisor.
For offline transactions, the ECB reiterates its commitment to cash like privacy. In these cases, neither the ECB nor intermediaries would know what was purchased, where it occurred, or from whom. Proximity based offline payments are described as essential to preserving the anonymity Europeans associate with cash.
A more resilient payment ecosystem
The annex places the digital euro within a broader strategy to strengthen Europe’s payments market. By using open standards, private providers could integrate the digital euro into existing solutions, including physical cards. The aim is to expand the reach of European payment services without requiring new acceptance networks. Policymakers see this as a way to bolster resilience and reduce dependence on non European infrastructures.
As legislative discussions continue in Brussels, the new ECB material offers lawmakers clearer insight into the project’s practical and regulatory implications. The technical annex signals that design work is entering a more advanced phase, with privacy, costs, and interoperability at the center of negotiations between the ECB, Parliament, and the Commission.
Sources: European Central Bank technical annex published on 17 November 2025.