EU lawmakers moved the digital euro plan forward on Tuesday by voting for new safeguards on privacy, cash access and financial stability, advancing the bloc’s push to create a central bank-backed digital payment system.
The European Parliament’s Economic and Monetary Affairs Committee adopted its position on the digital euro proposal by 43 votes to 14, with one abstention, as part of a wider single currency package covering digital euro services and the legal status of cash.
Privacy-by-design leads digital euro framework
According to the committee, the digital euro would be issued by the European Central Bank and designed to work both online and offline, giving citizens and businesses another way to pay while reducing reliance on non-EU payment providers.
Online payments would run through an account-based system, while offline payments would work through local storage devices in a way similar to cash. However, if a device holding offline digital euros is lost, the funds would also be lost, with no refund possible.
Members of the European Parliament insisted that privacy protections be built into the digital euro from the start, with technologies such as zero-knowledge proofs allowing transactions to be verified without exposing personal data and ensuring the ECB would not have access to personal identification information.
Lawmakers set rules for digital euro access, fees and acceptance
Under the committee’s proposal, banks, e-money firms, post offices and regulated crypto-asset providers would be allowed to distribute the digital euro across the EU.
Most businesses would have to accept the digital euro, though exemptions would apply to self-employed workers and small or micro businesses that do not accept other digital payments. Temporary refusals would also be allowed in specific cases, including power outages.
Basic services, including opening an account, holding and managing funds, and receiving at least one payment instrument, would be free. Providers could charge for extra services, but offline payments would remain fee-free, while merchant and inter-provider fees would be capped.
Holding limits target financial stability
As a safeguard for the banking system, individuals would face a cap on how many digital euros they can hold, with MEPs proposing that the European Commission set the EU-wide ceiling based on ECB recommendations and review it at least every two years.
Businesses could only hold digital euros temporarily to collect incoming payments for up to 24 hours, and the currency would carry no interest.
Before launch, MEPs want the ECB to finalize a rulebook, build infrastructure, run real-life pilot tests and clarify liability rules, especially for offline risks such as double-spending.
Cash protections move in parallel
A separate file adopted by the committee would require EU member states to keep cash accessible and prepare for digital payment disruptions. Businesses would not be allowed to ban cash through “no cash” signs or standard contract terms.
Rapporteur Fernando Navarrete Rojas said the package protects citizens’ freedom to choose how they pay, adding that the digital euro would “complement cash, never replace it.”
The negotiating mandates will be announced at the July plenary session, before talks with the Council on the final legislation.
