EU-approved digital euro dual-track design! Online and offline versions are being developed simultaneously, entering the legislative stage

The EU Council supports a dual-track design for digital euro, emphasizing privacy-oriented cash-like mechanisms for both online and offline use. However, it still faces technical limitations and legislative challenges, with cautious prospects for advancing legislative procedures.

The European Union (EU) Council recently officially expressed support for the European Central Bank’s (ECB) proposed blueprint for the digital euro design, agreeing that the digital euro will be launched with both an “online version” and a “privacy-focused offline version.” The next step will be the review process by the EU legislative bodies.

Online and offline versions of the digital euro are advancing simultaneously, expanding digital payment flexibility

According to the latest documents from the EU Council, the Council has explicitly endorsed the ECB’s overall design direction for the digital euro and aligns with the central bank’s stance that both online and offline versions will be planned and launched concurrently.

This means that if the digital euro is officially launched in the future, users will be able to transact both online and offline, increasing the flexibility of digital payments. Once the legal framework is approved, the decision to issue will be made by the ECB. Currently, the ECB indicates that the digital euro could be operational before 2029.

Central bank design completed, legislative approval returns to the political level

ECB President Christine Lagarde also pointed out in related statements that the central bank has completed the system and technical design, and the next critical step is not with the ECB but with the political and legislative processes of the EU.

She stated that subsequent discussions will be continued by the EU Council and evaluated by the European Parliament to determine whether the proposals from the European Commission are sufficiently complete, whether revisions are needed, and whether they should be formally transformed into legally binding EU legislation.

Offline design focus, privacy-oriented cash-like mechanism

In terms of system positioning, the offline digital euro is designed as a more cash-like digital payment tool, with the core goal of reducing the possibility of transaction tracking and analysis. The document notes that traditional digital payment systems often leave transaction records that can be analyzed, whereas the offline digital euro aims to prevent third parties from linking multiple transactions to the same user, thereby enhancing transaction privacy.

Furthermore, offline transaction data will not be transmitted back to a central system but will be stored only on the devices of the transacting parties. In practice, offline digital euro transactions will be conducted via devices with certified, built-in secure elements, where the digital euro stored and signed by the central bank is transferred directly between devices, mainly for face-to-face payment scenarios.

Offline digital euro still cannot fully replicate cash, with technical limitations emerging

However, the document also admits that in a digital environment, requiring both parties to be physically close is not a reliably enforceable condition.

It points out the risk of “Relay Attacks,” explaining that attackers could set up proxy devices near the payer and payee, extending the original short-range communication signals over the network, allowing transactions originally designed to be face-to-face to be conducted over a distance.

Regarding this, the EU Council admits that current preventive measures are quite limited. In digital currency systems, it is difficult to reliably enforce that transactions must be “face-to-face,” nor can they fully replicate the “physical contact” characteristic of cash.

The document also states that although offline digital euro emphasizes high privacy, it is not equivalent to fully anonymous physical cash. Related private keys and assets must be stored in certified mobile devices or secure elements within smart cards. This means that the offline digital euro remains a regulated and managed digital payment tool in essence.

• This article is reprinted with permission from: 《Chain News》
• Original title: 《EU Approves Dual-Track Design for Digital Euro, Online and Offline Versions Progress Simultaneously》
• Original author: Louis Lin