EU committee backs digital euro rules after 43-14 vote

The European Parliament’s Economic and Monetary Affairs Committee approved its position on the digital euro package by 43-14 in a vote held Tuesday, moving the proposal closer to formal consideration by the full Parliament and EU member states. The European Central Bank has targeted a launch around 2029.

The approved draft sets out how the digital euro would work, who could distribute it, and measures intended to protect privacy and financial stability. MEP Fernando Navarrete Rojas described the package as ‘protects citizens’ freedom to choose how they pay’ and added it would ‘complement cash, never replace it.’ The legislative work on a digital euro began in 2020.

Under the draft, the ECB would issue the digital euro. Online payments would use an account-based system. Offline payments would be stored locally on users’ devices so transactions can take place without a network connection; any offline balance held on a lost device would not be refundable.

Privacy-preserving techniques such as zero-knowledge proofs are required by the draft to allow transaction verification without exposing personal data. The text specifies that the ECB would not have access to personal identification data tied to users’ transactions.

To limit risks to the banking system, the digital euro would not pay interest. The draft calls for holding limits for individuals; the European Commission would set those caps based on ECB recommendations and review them regularly. Businesses would generally be allowed to hold digital euros only temporarily, typically up to 24 hours to collect payments. Most businesses would be required to accept the digital euro, with exemptions for very small firms and some self-employed operators that do not already accept digital payments.

Basic services such as account access and standard payments would be free for users, while additional services could carry capped fees for providers. Offline transactions would remain free. The proposed distribution model includes banks, payment providers and regulated crypto firms, and could extend to post offices and e-money institutions across the euro area.

Before any public launch, the ECB must finalise technical rules, run pilot tests and coordinate with payment providers. The draft envisions a rollout period of at least two years after approval of the final law; ECB officials have delayed the project while legislation and technical standards are completed, and an ECB executive board member has indicated a likely 2029 start.

In the private sector, the Qivalis consortium expanded to 37 members after adding 25 banks from 15 countries, including ABN AMRO, Rabobank, Nordea and Intesa Sanpaolo. The Amsterdam-based group is targeting a second-half 2026 launch for a regulated euro stablecoin. Howard Davies, chairman of Qivalis’ supervisory board, stated the group aims to embed European principles around data protection, financial stability and regulatory rigour into the new coin.

Lawmakers and industry participants have expressed support for a public digital euro coexisting with private payment solutions and for developing euro-denominated stablecoin alternatives to current dollar-pegged products.