The European Parliament on 9 Jul cleared the way for talks with EU governments on the digital euro, moving the project into its final stage of negotiations after years of debate over privacy, bank deposits and Europe's reliance on non-EU payment providers.
Members of the European Parliament voted 416 in favour, 169 against and 22 abstentions to proceed with negotiations on the creation of the digital euro, formally opening talks with EU member states. Spain's Fernando Navarrete Rojas will lead Parliament's negotiating team, with a first round of talks with the Irish Presidency of the Council expected shortly.
The digital euro would be an electronic form of central bank money issued by the European Central Bank. It is designed to work alongside cash and commercial bank money, not replace them, and would be used for retail payments online and offline, the draft proposal states.
Payment sovereignty in focus
The vote matters because Europe wants a public digital payment option at a time when cards, mobile wallets and online payments are dominated by private and largely non-EU providers.
Supporters argue that a digital euro could reduce reliance on Visa, Mastercard, Apple Pay and Google Pay while giving citizens access to central bank money in digital form. Critics remain concerned about privacy, costs, bank deposit outflows and whether the project duplicates systems that already work.
Parliament's negotiating position calls for privacy safeguards, offline payments, free basic services and a cap on how many digital euros any individual can hold. Banks and payment providers from non-euro EU countries would also be allowed to distribute the digital euro.
Businesses would generally have to accept it, though exceptions would apply to self-employed workers and small or micro businesses that do not accept other digital payments, according to the draft.
Fees and banks remain unresolved
The hardest talks are likely to centre on compensation and fees. Banks and payment service providers would distribute digital euro services to customers, while the ECB would provide the underlying infrastructure.
That raises the question of who gets paid, by whom and how much. Merchants are expected to face lower fees than they do on card transactions, but banks want compensation for providing wallets, customer support and compliance checks.
The proposal also keeps cash in the frame. Euro area countries would have to ensure cash remains accessible and businesses would not be allowed to ban cash entirely.
A political agreement is expected by the end of 2026 if negotiations hold. The ECB has previously pointed to a pilot programme in 2027 and possible retail availability in 2029.
