The deadline for completing the preparation phase for issuing the digital euro is approaching. The third progress report reveals some interesting details about offline payment functionality. A blackout could prove to be the scenario in which the e-euro shines among its competitors.
Conceptual work on a European version of central bank digital currency (CBDC) is underway at an “ambitious pace.” The two-year preparatory phase for issuing the e-euro began on November 1, 2023. Analyses and testing should be completed soon, and the ECB President has repeatedly emphasized that she wants a decision on the next steps to be made at least by the end of October at the level of the bank's Governing Council.
In mid-July 2025, another progress report was published. The previous document was released in February 2025, and on Bankier.pl we presented one of the threads – work on the so-called digital euro rulebook, a set of rules governing the payment scheme. What was being worked on in the meantime?
Visionaries and Pioneers, Market Research
The report, in varying degrees of generality, describes more than a dozen different areas of work. One of these is the creation of an “innovation platform,” where approximately 70 selected volunteer entities (fintechs, banks, payment service providers) were to analyze selected problems.
The first group, dubbed “pioneers,” tested possible forms of implementing conditional payments . An example of such a transaction scenario is settlement contingent upon successful and confirmed delivery of goods. The Bank of Israel, among others, provides the option of conditional payments in its CBDC.
The second group, known as the “visionaries,” focused on “conceptual development, brainstorming creative ideas, and use cases to imagine how a digital euro could fit into the financial ecosystem.” The results of these meetings are expected in the second half of 2025.
The ECB also boasts of conducting a series of focus group studies in each eurozone country. Small merchants and consumers were examined, with the primary goal of identifying factors that may prompt a shift in payment preferences . The results will also be published in the second half of the year.
Other activities include consultations with consumer organizations on the accessibility of payment instruments in the context of the needs of minorities and people with disabilities, as well as conceptual work on the e-euro application . As a reminder, the digital euro is to be available either through payment service providers (i.e., intermediaries, e.g., in a bank's mobile app) or through an application jointly developed by the eurozone's central banks.
Offline payments – “significant progress”
The latest report devotes only a few paragraphs to offline payments, i.e., transactions that don't require a connection to the network supporting the digital euro. This function of the European CBDC is becoming increasingly important over time – it would not only strengthen the system's resilience to disruptions (which is not a purely theoretical scenario) but could also provide an advantage over products from global (read: American) payment organizations. The importance of offline payments is evidenced by the fact that, in the tenders for the project, over half the budget (€1.1 billion) was allocated to building the technical foundations for such a solution .
The ECB boasts that significant progress has been made in analyzing requirements for offline payments. One of the aforementioned features is automatic offline wallet top- up. Until now, the so-called waterfall mechanism (described in more detail here), i.e., topping up a CBDC wallet from a connected account, such as a bank account, was mentioned in e-euro documents in the context of online payments. Now, this “backup” option is being discussed, so that users don't have to worry about accessing e-money in the event of power or connectivity outages. But that's not all; top-ups will also be possible after an emergency situation.
“The ECB is examining resilience measures that should include offline functionality for the digital euro to remain operational during a payment network outage, starting with an examination of the feasibility of enabling users to top up offline wallets in emergency conditions. This involves finding a way to transfer funds to an offline wallet outside the regular payment infrastructure if this infrastructure becomes unavailable. The results of this work will help inform decisions on whether to incorporate these features into the final offline solution, in collaboration with vendors,” the report states.
What's next?
The report indicates that the ECB is finalizing the selection process for potential providers of the platform and technical infrastructure for the digital euro. Framework agreements specifying the scope and terms of “potential future work” will be signed by the end of 2025. It emphasized that the agreements do not imply any financial obligations on the part of the Eurosystem “at this stage.”
The next draft of the digital euro rulebook is expected to be presented in the second half of the year. The deadline is less specific than in the previous report, which mentioned Q3 2025. However, the caveat is again that “the draft rulebook will be sufficiently flexible to accommodate any future amendments resulting from legislators' input into future legislation.”
