ECON committee approves its position on the digital euro

The European Parliament’s ECON Committee adopted with overwhelming majority its position on the digital euro and the mandate for inter-institutional negotiations. This decision marks a historic step towards creating a central bank digital currency designed to serve everyday citizens rather than private financial interests. For us, this vote is a great shot after years of campaigning to keep money a public good, as the world shifts away from physical cash.

What are the core objectives of the digital euro?

Article 1 of the European Parliament’s position establishes the structural objectives of the digital euro framework. It defines the digital euro as a sovereign, secure digital means of payment engineered to safeguard public access to central bank money while guaranteeing the fundamental freedom of citizens to choose how they execute payments. The text establishes that the digital euro belongs entirely to its users and is in no way the property of private banks.

How does the approved framework protect user choice and privacy?

The approved text guarantees that citizens can choose freely between online and offline functionalities surpassing the limitations of the initial draft put forward by rapporteur Navarrete. EU residents will be able to use their digital euro account in all payment contexts - physical stores, e-commerce, etc. -  from the very beginning, despite earlier efforts to restrict the online version. Meanwhile, the offline version will use local storage devices to let people make transactions safely without needing an active internet connection. 

Privacy protections are secured through mandatory privacy-by-design and strict data minimisation technologies. These legal firewalls make it impossible for the European Central Bank (ECB) to identify individual digital euro users. Offline transactions cannot be tracked or retained by banks or the ECB, and they cannot even be stored on your local device unless you explicitly choose to keep a record, providing an electronic alternative that nears the absolute anonymity of physical cash. 

Who will distribute the digital euro to whom?

Like the Commission’s and the Council’s texts, the European Parliament’s position on the digital euro sees private banks as the main distributors of the digital euro. Importantly, however, the European Parliament also requires EU Member States to establish at least one dedicated public distributor, such as a public post office or a public bank. 

This ensures that the digital euro is distributed directly to unbanked individuals, vulnerable people, and those with limited digital skills without forcing them to rely on commercial banks. It could also enable financially-sanctioned people (such as UN Special Rapporteur Francesca Albanese) to access a digital payment instrument without depending on the goodwill of private banks.

Where can one pay with the digital euro?

The digital euro will be legal tender, meaning that it must be accepted as a payment method all across the euro area. The European Parliament report requires all commercial activities to accept the digital euro, with one exception: small enterprises that don’t accept any payment instruments rather than cash can be exempted from accepting the digital euro. People will be able to pay with the digital euro in any store taking payments in cards, direct debit and credit transfers. 

Why is removing holding limits critical for “public” money?

The maximum amount of digital euros that a person can hold, known as a holding limit, has been a major topic of debate. The ECB is set to be responsible for deciding the holding limit, within a range that has a maximum set by the European Commission in coordination with the European Parliament and the Council. 

We hope that in the long run, this cap will be raised and ultimately, gradually deleted.

For the digital euro to serve as a genuine electronic form of cash, it must function not just as a transactional utility, but as a reliable store of value.

The ECON Committee also adopted the mandate for inter-institutional negotiations, meaning that a vote in plenary won’t be needed, unless specifically requested by MEPs during the July plenary.

We will keep monitoring this file to ensure these hard-won public protections are not diluted by private corporate interests!