EU Council Backs Online and Offline Versions of the Digital Euro
The Council of the European Union has formally endorsed the European Central Bank’s (ECB) plan to introduce a digital euro, supporting both online and offline versions of the central bank digital currency (CBDC).
According to a document released on Friday, the Council aligns with the ECB’s approach to launch both variants at the same time, ensuring accessibility while addressing privacy concerns for users who prefer cash-like transactions.
ECB President Christine Lagarde emphasized that the next steps now lie with EU lawmakers. She stated that it is up to the European Council and the European Parliament to review the European Commission’s proposal and decide whether it should be adopted as legislation or modified further.
Offline Digital Euro: How It Works and Its Limits
The offline version of the digital euro is designed to allow in-person payments without an internet connection. Authorized devices would exchange ECB-signed digital euro tokens using near-field communication (NFC), similar to contactless payments.
However, experts highlight technical challenges. One key concern is the risk of relay attacks, where attackers could use proxy devices to extend NFC communication over the internet. This makes it difficult to fully prevent non-proximity transactions by advanced users.
An expert opinion from the European Data Protection Board acknowledges these limitations, noting that effective countermeasures are scarce. The board concluded that physical proximity—one of the defining features of cash—cannot be reliably enforced in a digital currency system.
Read More:-Why Is The Crypto Market Up Today?
Privacy, But Not the Same as Cash
While the offline digital euro is designed to be privacy-focused, it will not offer complete anonymity like physical cash. Digital euros and the private keys used to manage them would be stored in secure elements of certified devices, such as smartphones or smart cards.
This approach aims to strike a balance between user privacy, security, and regulatory oversight, marking a significant step forward in Europe’s journey toward a digital currency ecosystem.
Disclaimer:
This information is for educational purposes only and should not be considered financial advice. Cryptocurrency investments carry significant risk. Always conduct thorough research and consult with financial professionals before making investment decisions.