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The European Parliament’s economic affairs committee has approved draft rules for a digital euro, giving the European Central Bank a key committee-level step toward formal negotiations. The committee backed the text by 43 votes to 14, with one abstention.
The vote does not launch the digital euro. It clears a committee hurdle before a full Parliament vote and possible talks with EU governments and the European Commission. Lawmakers are still targeting final legislation by the end of 2026.
ECB Gets Backing After Six-Year Push
The digital euro has been in development for about six years, but legislation had been slowed by disputes over bank deposits, privacy, costs and whether Europe needs a public digital payment rail.
The ECB wants the digital euro to work as a central bank-backed wallet for eurozone residents. Banks and fintech firms would distribute it, while the ECB would guarantee the money behind it.
Brussels Cites Payment Sovereignty Risk
Brussels also sees the project as a sovereignty tool. EU officials have warned that Europe relies heavily on non-European payment networks, including Visa and Mastercard, while dollar-backed stablecoins are spreading faster than euro-denominated digital payment alternatives.
That argument has helped keep the project alive despite concerns from banks and some lawmakers.
Holding Limits Stay in Committee Text
The committee version keeps several guardrails meant to address bank concerns. The digital euro would not pay interest, would not charge user fees and would be subject to holding limits to reduce the risk of deposits moving out of commercial banks.
Businesses would not be allowed to hold digital euros for more than 24 hours. The European Commission, guided by the ECB, would regularly review the limits.
Banks Remain Central to Distribution
The structure keeps banks at the centre of distribution while letting the ECB issue a public digital payment instrument. That compromise is meant to make the product useful without turning it into a direct rival to bank accounts.
It also gives lawmakers a way to support a public digital euro while limiting pressure on commercial bank deposits.
Pilot is Planned for 2027
The ECB is expected to run a 12-month pilot in 2027 if legislation is adopted. A full rollout is not expected before 2029. Cost remains one of the open fights. Setup expenses are estimated at €4 billion to €6 billion, with unresolved questions around compensation and merchant fees.
If Parliament backs the text, negotiations with EU governments and the Commission would decide the final legal framework.
