The European Parliament’s Economic and Monetary Affairs Committee have backed draft rules that could enable the launch of a digital euro as early as 2029. The committee’s decision on 23 June 2026 marks another milestone in the long-running effort to create a central-bank-issued digital version of the single currency.
The vote, which passed 43 to 14 with one abstention, forms part of a broader “single currency package” that also strengthens the legal status of physical cash.
The digital euro would function as a new, electronic form of central bank money issued directly by the European Central Bank (ECB) and national central banks.
It is designed to complement, rather than replace, euro banknotes and coins, giving citizens and businesses an additional public payment option in an increasingly digital economy.
Proponents argue the project will bolster European sovereignty in payments at a time when many digital transactions still rely on non-EU providers.
By offering a secure, widely accepted digital alternative backed by the Eurosystem, the initiative aims to reduce dependence on foreign card networks and enhance resilience against potential disruptions.
It is also intended to support financial inclusion and maintain public access to central bank money as cash usage continues to decline across the euro area.
Under the committee’s position, the digital euro would operate in both online and offline modes.
Online payments would rely on account-based systems, while offline transactions could use secure local storage devices, functioning similarly to physical cash.
Privacy protections are central to the framework: the design incorporates “privacy by design and by default” principles, including technologies that allow transaction verification without revealing unnecessary personal details.
The ECB itself would not have access to users’ identifying information.
Basic services such as opening an account, holding funds, and making payments would be provided free of charge.
Additional features could carry fees, though these would be subject to caps, particularly for merchants and between providers. Offline payments would be entirely fee-free.
To safeguard financial stability, individual holding limits would be set by the European Commission following ECB advice, with regular reviews.
Businesses would generally be prohibited from holding large balances, with a 24-hour window permitted only for accumulating incoming payments.
The digital euro would carry no interest, either earned or charged.The package also reinforces the role of cash.
Euro-area countries would be required to ensure continued access to banknotes and coins, prevent businesses from refusing cash outright, and prepare contingency plans for digital payment outages.
Special attention is given to vulnerable groups, including the elderly and those without bank accounts.
Distribution of the digital euro would be open to a wide range of authorised payment service providers, including banks, e-money institutions, post offices, and certain regulated crypto-asset service providers.
Most merchants would be obliged to accept it, with limited exceptions for very small operators. Non-euro-area EU countries’ providers could also participate under specific conditions, while the ECB retains oversight powers.
Before any launch, the ECB must complete technical preparations, including finalizing operational rules, building necessary infrastructure, conducting real-world pilot tests (expected from mid-2027), and addressing liability issues, especially for offline functionality.
A minimum 24-month rollout period would then allow banks, merchants, and the public to adapt, supported by awareness campaigns.
The committee’s approval now moves the files toward a plenary vote in the full European Parliament, expected in early July.
If confirmed, formal negotiations (trilogues) with EU member states in the Council and the European Commission could begin soon after, with the goal of reaching final agreement by the end of 2026.
The ECB has previously indicated it could be ready for a potential first issuance of the digital euro in 2029, assuming the necessary legal framework is in place. While the project still faces political and technical hurdles, the latest parliamentary step brings Europe closer to having a modern, public digital payment instrument that prioritizes privacy, choice, and strategic autonomy alongside the continued use of cash.
