EU finance committee advances digital euro bill

The European Central Bank (ECB) has received a further boost to its long-anticipated digital euro, with the European Parliament’s Economic and Monetary Affairs Committee (ECON) approving its position on the proposed central bank digital currency (CBDC).

• European Central Bank advances digital euro initiative
• ECON to resolve cap on digital euro holding
• Safeguarding personal data in the digital euro framework
• Progressing towards the launch of the digital euro

On June 23, the ECON adopted its position on the single currency package, which included establishing the digital euro, by a vote of 43 to 14, with 1 abstention.

According to a June 23 European Parliament press release, the digital euro would be a new, blockchain-based form of electronic money—or CBDC—issued by the ECB and designed to work online and offline, with online payments processed through an account-based system, while offline payments would work directly via local storage devices.

“The digital euro would offer citizens and businesses a private, secure and innovative way to pay, while reducing reliance on non-EU providers,” said the European Parliament.

The ECON vote marks an important milestone in establishing the framework for the European Union’s potential CBDC, with the ECB currently targeting 2029 for the digital euro’s launch.

“Europe does not have to choose between the digital euro and successful private payment solutions. We need both to work together,” said Fernando Navarrete Rojas, member of the European Parliament (MEP). “The agreement rightly recognises the dual approach: existing standards and infrastructure should be reused wherever possible.”

He added that this approach would “allow European payment solutions to connect to a common acceptance infrastructure and become interoperable across borders.”

The ECON’s approval follows lengthy negotiations among the ECB, European Parliament lawmakers, and the banking sector, with concerns raised about potential bank disintermediation leading to revenue losses, as well as broader privacy concerns—a common complaint of CBDC naysayers.

Appeasing banks

To protect the financial system, the committee resolved to cap the number of digital euros any individual could hold.

As for the cap, the committee didn’t specify it, instead proposing that the EU ceiling be set by the European Commission—the EU’s executive body—based on ECB recommendations and reviewed at least every two years. The committee also noted that MEPs would want the European Parliament to have full decision-making powers over this process.

Businesses, meanwhile, would not be allowed to hold digital euros at all, except to accumulate incoming payments for up to 24 hours.

But perhaps the most significant demand of the committee was that “the digital euro would not earn or cost any interest.”

Combined, these mandates appear aimed at easing the minds of the EU’s banking sector, specifically over the prospect of the incoming CBDC leading to disintermediation—consumers choosing to cut out the middleman and move their money into private wallets.

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Privacy

“The agreement also ensures that privacy will be built into the digital euro from the outset,” Navarrete Rojas said. “Europeans will gain a secure digital payment option while remaining in control of both their money and their personal data.”

This should go some way to persuading fence-sitting skeptics of CBDCs to support the digital euro, but is unlikely to appease the hardcore opponents.

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Long road to digital euro

The digital euro has been a long time in the making, with the project beginning back in 2021 when the ECB launched an investigation into a Eurozone CBDC, to be used by citizens and businesses for retail payments.

This lasted for two years, after which the central bank began the digital euro “preparation phase” in November 2023. After positive progress, in November 2024 the ECB called for partners to test conditional payments in a CBDC simulation that started in February 2025. The ECB later announced it was expanding this initiative to enable settlement of transactions between institutions via a wholesale CBDC payment system.

In March 2025, ECB President Christine Lagarde confirmed the bank’s commitment to the project, saying that the team behind the digital euro was “focused on accelerating the pace.”

A couple of months later, on May 5, 2025, the ECB announced that it had established an “innovation platform” with 70 participants to collaborate on testing the digital euro project. The platform was intended to simulate the proposed digital euro ecosystem, “in which the ECB provides the technical support and infrastructure for European intermediaries to develop innovative digital payment features and services at European level.”

All the while, talks and negotiations continued between the ECB, European lawmakers, and member states. In September of last year, a compromise and roadmap were reportedly agreed upon, including procedures that would give ministers a say on whether to launch and on holding limits.

ECB executive board member Piero Cipollone—a long-time advocate of the digital euro and one of the main figures driving the project—hailed this as a “major breakthrough,” to the point that he felt confident enough to declare: “The discussion at the level of member-states is going very well… The middle of 2029 could be a fair assessment.”

Cipollone reiterated this latter pledge in February of this year, during an executive committee meeting of the Italian Banking Association.

“We aim to be ready for a potential first issuance of the digital euro during 2029,” Cipollone said, adding that “a pilot exercise and initial transactions could be launched in mid-2027.”

Tuesday’s ECON vote is another milestone on the long road to meeting these proposed dates. And yet, it still remains for the European Parliament to agree and pass the necessary legislation. Until this happens, all the ECB can do is continue to plan and persuade.

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