The EU Parliament's economic committee has approved draft rules for the digital euro, advancing the ECB's efforts towards a eurozone CBDC.
According to Reuters, the committee's vote on 23 June 2026 opens the path to formal negotiations between the European Parliament, the Council of EU governments, and the European Commission, with discussions expected to begin in July 2026. Final legislative approval is targeted by the end of 2026. Should the timeline hold, the ECB plans to run a 12-month pilot starting in the second half of 2027, ahead of a full rollout in 2029.
Reducing dependence on non-European payment networks
The digital euro is designed to function as an electronic wallet, guaranteed by the ECB but distributed through commercial banks and fintech companies. It would allow all eurozone residents to make payments online and in person, without depending on card networks such as Visa and Mastercard.
The initiative has become more pressing since Donald Trump returned to the White House, introducing tariffs on EU imports. Furthermore, EU policymakers have raised concerns that the US could leverage its dominance over global payment networks as a geopolitical lever, strengthening the case for a pan-European alternative.
Safeguards for banks and open questions on costs
The draft regulation incorporates compromises reached after three years of negotiations between the ECB and the European banking sector. Lenders had pressed for limits on the project's scope, citing deposit outflow risks and lost revenues.
Under the proposal, the European Commission would set holding limits for individual users based on an ECB recommendation, with the ceiling reviewed at least every two years. Businesses would not be permitted to hold digital euros for longer than 24 hours, and the currency would earn no interest and carry no cost to users. An exemption from the mandatory acceptance requirement is included for small-business owners and the self-employed.
ECB simulations indicate that a EUR 3.000 holding limit could trigger withdrawals of up to EUR 699 billion from eurozone banks, equivalent to 8.2% of retail sight deposits, with a disproportionate impact on smaller lenders.
Moreover, setup costs for participating companies are estimated at between EUR 4 billion and EUR 6 billion over four years, with compensation arrangements remaining an unresolved point ahead of inter-institutional negotiations.
Laura Casonato, head of policy at Positive Money Europe, noted that the proposal reflects political compromise, keeping commercial banks central to distribution and limiting the role of public channels, without positioning the digital euro as a substitute for bank deposits.
Not all lawmakers backed the draft. The Europe of Sovereign Nations group voted against, raising the possibility of a further plenary vote before negotiations can begin. One member of the Patriots for Europe Group cautioned that the digital euro could be overtaken by private-sector alternatives such as Wero, an instant payment service backed by a consortium of European banks, before reaching its full launch date.
