The European Parliament's economic affairs committee has approved the legal framework for the digital euro and ordered trilogue negotiations. In early July, the plenary is expected to vote, after which the actual negotiations between Parliament, the EU Council and the Commission will begin.
The digital euro is an electronic currency guaranteed by the European Central Bank, to be distributed to the public through banks and fintechs. Users would pay neither interest nor fees. The plans include an online and an offline version, the latter enabling phone-to-phone payments without internet and with cash-like privacy. The ECB Governing Council launched the project back in July 2021, and the preparation phase, covering rulebook development, tenders and more than 70 partner institutions, ran from November 2023 to October 2025. In December 2025, moreover, the EU Council set out its negotiating position. The ECB's Eurosystem estimates development costs through launch at roughly EUR 1.3 billion. In addition, operating costs of about EUR 320 million per year are expected from 2029 onward. The full launch is ultimately planned for 2029, provided the regulation is adopted within 2026.
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Trilogue as the next step on the home stretch
With the ECON committee's vote, the decisive phase of the legislative process begins. The committee ordered so-called trilogue negotiations, in which the European Parliament, the EU Council and the European Commission must agree on a common legal text. The EU Council had already staked out its negotiating position in December 2025, so all three institutions are now at the table. Barring an objection in the plenary, Parliament is expected to vote from 6 to 9 July. Final legislative approval is then targeted for the end of 2026.
One of the toughest points of contention in the trilogue, however, concerns the money. Participating banks would have to bear EUR 4 to 5.8 billion in setup costs over four years, and the question of their compensation remains open. Pushback came from within Parliament itself: Siegbert Frank Droese of the Europe of Sovereign Nations group confirmed that his faction had voted against the proposal, and the Patriots for Europe around Auke Zijlstra were likewise critical. Markus Ferber, a leading ECON member, by contrast justified the project with Europe's geopolitical dependence. In times of geopolitical tension, he argued, one could no longer accept that digital payments depend largely on the goodwill of a few foreign providers.
Visa and Mastercard dominate Europe's payment system
Behind the political will lies a concrete dependency. Around two thirds of all card transactions in the eurozone are processed by non-EU companies, chiefly Visa and Mastercard. Together, both providers handle more than EUR 7 trillion in European payments and hold 61% of card transactions. The ECB therefore warns that, without its own public infrastructure, a "digital dollarization" looms, and with it a loss of monetary sovereignty.
The urgency rose noticeably after Donald Trump's return to the White House, because tariffs and dependency debates exposed Europe's strategic vulnerability. At the same time, Trump barred the Federal Reserve from issuing its own digital currency, while other countries press ahead. China is already testing the digital yuan at large scale, India and Brazil are running pilots, and the United Kingdom is focusing on research for now.
Domestically, however, the project remains a hard sell. According to an ECB report from 2025, 58% of European consumers are hesitant about digital euro transactions. The political will thus meets a population that is apparently not yet convinced of the added value over existing payment methods.
Holding limits and the stability risk for banks
The project's central conflict lies in the banking system. If citizens were to shift their savings en masse into central-bank-guaranteed wallets, commercial banks could lose a substantial part of their deposit base. Therefore, a holding limit per person is planned. ECB simulations show that, with a cap of EUR 3,000, up to EUR 699 billion could flow out of eurozone banks, which corresponds to around 8.2% of all retail demand deposits. Small market participants and retail banks in particular would be affected, although the EUR 3,000 figure so far remains a simulation scenario rather than a decided value.
The final amount will later be decided by the European Commission on the basis of an ECB recommendation, with a review at least every two years. Companies, moreover, may not hold digital euros for longer than 24 hours, and an exemption from the acceptance obligation applies to small businesses and the self-employed. These design decisions show how strongly the protection of the existing banking system shapes the model.
Privacy and the risks of a programmable digital euro
Protecting privacy ranks among the central concerns of the project's development. The ECB stresses that data protection is an integral part of the project from the outset. The plans include both online and offline payments, in which only the payer and the recipient know the personal transaction data. At the same time, effective fraud prevention remains decisive for trust in the new means of payment.
Despite these assurances, a central bank digital currency (CBDC) carries various risks. It could be programmed so that spending is restricted or tied to conditions. Negative interest on balances, capital controls or automatic tax deductions would also be technically feasible. Furthermore, seamless transaction monitoring could significantly curtail financial privacy.
Stablecoins instead of a CBDC: the US chooses a different path
The global development of digital currencies shapes the dynamics behind the digital euro. The ECB hopes that the course toward dollar-pegged cryptocurrencies, backed by US President Donald Trump, will accelerate the European legislative process. While Washington integrates privately issued stablecoins into the financial system through regulatory guidelines, it has at the same time banned a state-run central bank currency. As a result, a fundamental contrast emerges. The EU, with the digital euro, bets on state-controlled central bank money, whereas the US bets on a more decentralized model with privately organized stablecoins.
