European Parliament approves digital euro mandate for EU talks

The European Parliament has voted to support the creation of a digital euro, with 416 MEPs in favour, 169 against and 22 abstaining. The decision moves the proposed central bank digital currency into negotiations with EU member states as the European Central Bank works toward testing in 2027 and a possible launch in 2029.

The vote gives Parliament a mandate for the final legislative talks on the design of the instrument. Fernando Navarrete Rojas, the Parliament rapporteur on the file, will lead its negotiating team, with an initial round of talks due shortly with the Irish Presidency of the Council, which represents member states.

The digital euro project has developed over several years and has gained political momentum as EU lawmakers seek to strengthen Europe’s monetary sovereignty and reduce reliance on US-owned card networks Visa and Mastercard for everyday payments, according to the European Parliament’s framing of the debate.

What Parliament wants to negotiate

Under the Parliament’s position, the digital euro would be issued by the European Central Bank and used as a payment method online and offline. Parliament says it wants the instrument to be secure, private and free to use.

A central bank digital currency is a digital form of public money. In the EU proposal, the ECB would issue the digital euro, while banks and payment service providers would play a role in giving users access to it. That structure is intended to place the liability with the central bank while using existing payment firms and banking infrastructure for distribution.

Parliament says most businesses would have to accept the digital euro. The proposal would also cap the amount any individual could hold, a limit designed to shape how the instrument is used and to avoid unlimited shifts from bank deposits into central bank money.

Basic services would be provided without charge, according to Parliament. Those services would include opening an account, holding and managing funds, and access to at least one payment instrument.

The Parliament position would also allow banks and payment service providers based in EU countries outside the euro area to distribute the digital euro. That provision would broaden the potential network of providers beyond the currency bloc itself, while keeping issuance with the ECB.

Cash protections remain part of the package

The Parliament mandate links the digital euro to safeguards for physical cash. Euro-area countries would be required to keep cash accessible, businesses would not be allowed to refuse cash outright, and member states would have to monitor access to cash regularly, with particular attention to vulnerable groups.

The European Parliament’s economic and monetary affairs committee adopted draft rules linked to the ECB proposal in June. A full parliamentary vote followed after some political groups challenged that committee decision.

After the committee vote, Navarrete Rojas said Europe should not have to choose between a public digital euro and private payment systems. “Europe does not have to choose between the digital euro and successful private payment solutions. We need both to work together,” he said at the time.

He added that the agreement recognised a dual approach and said existing standards and infrastructure should be reused where possible. In his view, that would allow European payment systems to connect to common acceptance infrastructure and operate across borders.

The legislative talks with member states will determine the final shape of the project before any launch decision. The ECB has said it plans testing in 2027, ahead of a possible full introduction in 2029.

This story draws on original reporting from Finextra Research.