By 2022, the European Central Bank’s (ECB) digital euro project had entered a more detailed phase. Following public consultations and research studies, the focus shifted to technical design and policy decisions that would determine how Europe’s future digital currency might operate.
ECB Executive Board member Fabio Panetta, leading the effort, described the year as one of “intensive conceptual work.” The bank examined key issues such as distribution models, privacy safeguards, offline functionality, and potential caps on digital euro holdings to prevent large-scale withdrawals from commercial banks.
The ECB made clear that the digital euro would not replace cash but complement it. One of the main goals was to ensure citizens had access to central bank money in both physical and digital forms. “Cash will remain,” Panetta told the European Parliament in a 2022 hearing, “but people must also have the option to pay digitally with the same level of trust.”
Technically, the ECB evaluated two main distribution models. In one, the central bank would issue digital euros directly to consumers through digital wallets. In the other — favored by many within the Eurosystem — intermediaries such as banks and payment providers would handle customer interfaces while the ECB maintained the settlement infrastructure. This “intermediated model” was seen as balancing innovation with stability, avoiding disruption to the existing banking system.
Another key issue was privacy. The ECB explored solutions that would allow small payments to be made offline — similar to using cash — without the central bank or intermediaries recording personal details. For larger transactions, standard anti-money-laundering checks would still apply.
Meanwhile, lawmakers and industry groups weighed in. Banking associations warned that a poorly designed digital euro could lead to “disintermediation” — citizens moving deposits from banks to central bank wallets. To limit this risk, the ECB considered setting holding limits of around €3,000 per person.
By late 2022, the ECB had concluded that a well-designed digital euro could strengthen Europe’s payment ecosystem, improve cross-border efficiency, and enhance resilience. But it also acknowledged that success would depend on public trust and cooperation between central banks, governments, and private-sector players.
As the investigation phase neared its end, attention turned to the next step: how to prepare for real-world testing and legislative approval. The groundwork was laid for the ECB’s next major milestone — the launch of the preparation phase.