The European Parliament has backed the start of negotiations with the EU Council on legislation for a digital euro. Lawmakers say the new form of money should give citizens a secure way to pay and reduce Europe’s reliance on payment providers from outside the EU.
In a plenary vote, 416 MEPs supported a mandate to negotiate the creation of a digital euro, 169 voted against and 22 abstained. Separately, by a show of hands, they approved rules for payment providers based in EU countries that are not part of the euro area. A third file in the same package — on preserving the legal-tender status of euro banknotes and coins — was not challenged, so talks on that text can also begin.
The digital euro is conceived as an electronic form of money issued by the European Central Bank. It would work both online and offline. Online payments would run through an account-based system; offline payments would be made directly from a device, without a constant network connection.
Parliament’s position sets several key conditions. Basic use should be free of charge. Individual holdings would be capped: the ceiling would be set up by the European Commission on the ECB’s recommendation and reviewed at least every two years. Businesses would face tight limits on accumulating incoming payments.
MEPs insist on privacy safeguards: transactions should be verified without exposing personal data, and data should be processed only to the extent strictly necessary for the system to function. Most companies would be required to accept the digital euro; exceptions could apply to the self-employed and to small and micro enterprises that do not already accept other digital payments.
Parliament also wants to lock in access to cash. Euro-area countries would have to keep banknotes and coins in circulation; businesses would not be allowed to refuse cash with “card only” signs. Special attention would be given to older people, those on low incomes and people without access to traditional banking.
Talks with member states will be led by rapporteur Fernando Navarrete Rojas (EPP, Spain). A first round with the Irish Presidency of the Council is expected shortly. The institutions aim to finish the legislative work by the end of 2026. The ECB has previously spoken of a pilot in the second half of 2027 and a possible full issuance in 2029 — provided the law is adopted.
Supporters describe the project as a step toward EU payment sovereignty: retail payments in Europe today depend heavily on international cards and foreign infrastructure. Critics, including some right-wing groups that tried to challenge the committee mandate, warn of pressure on cash and risks to bank deposits. Parliament’s position states explicitly that the digital euro should complement cash, not replace it.
