Digital Euro Advances: EU Parliament Clears Path for Interinstitutional Negotiations
The European Parliament has taken a significant step toward launching a digital euro, the central bank digital currency (CBDC) for the eurozone. With 416 votes in favor, 169 against, and 22 abstentions, the parliament approved moving to the next stage of negotiations with EU member states to finalize a common proposal.
Fernando Navarrete Rojas, the rapporteur leading the negotiations, emphasized that the digital euro will complement, not replace, cash. “The digital euro will complement cash, never replace it. No one should be forced away from cash, and no one should be left without a secure, resilient and genuinely European digital payment option,” he stated.
Key features of the parliament’s position include wide acceptance of the digital euro, with exceptions for small and micro enterprises that do not accept other digital payments. Privacy safeguards for transactions will be established. Basic services, such as opening accounts and managing funds, will be free, including access to at least one payment instrument. To protect commercial bank liquidity, there will be a cap on the maximum amount of digital euros a person can hold in the initial phases.
The European Central Bank (ECB) has been preparing for the currency’s integration into the payments ecosystem, partnering with major European payment standard providers. The ECB views the digital euro as a counterbalance to the growing influence of private money, particularly stablecoins. Piero Cipollone, ECB Executive Board Member, stressed that the digital euro will “reduce Europe’s dependence on external providers and support innovative, pan-European payment solutions for consumers and merchants for domestic retail payments.”
The digital euro was first proposed in 2023 to help Europe maintain monetary sovereignty and provide digital cash to citizens. The negotiation phase now begins, with the parliament and member states working toward a unified implementation.