The European Parliament has confirmed its negotiating position on the digital euro and, following a vote in Strasbourg, the EU is now preparing for the next stage of talks with member state governments.
The digital euro is planned as an electronic form of central bank money, issued and backed by the European Central Bank. It is intended to complement cash and existing banking services rather than replace them. Under the proposal, consumers would hold digital euros in a dedicated wallet, subject to a holding limit that is yet to be set. The system is designed to support both online and offline payments and to provide a high degree of privacy, with the ECB unable to directly identify users from payment data. In this model, the ECB would provide the underlying infrastructure, while commercial banks and payment service providers would offer digital euro services to customers.
Negotiators say the most sensitive issue will be reaching agreement on the compensation model—deciding which financial institutions should be compensated, how much they would receive, and how payments would be structured for participating in digital euro services. Another major point concerns how fees would be shared across the payments chain, with expectations that merchants would pay lower fees than they do for card transactions.
More intensive negotiations are expected in autumn, with final approval targeted for later in the year. If the timeline holds, the digital euro is expected to be available for retail payments from 2029, after a pilot phase is due to begin in 2027
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