The introduction of the digital euro, a digital form of central bank money, is in the EU’s political mills. The project is encountering significant resistance, particularly in the European Parliament, and is dragging on. The legal basis for the digital means of payment was originally supposed to be established in the previous legislative term. However, conservatives like the then-reporteur Stefan Berger (CDU) applied the brakes. The member of the EPP group did not even present a negotiation proposal. Proponents, however, still see the initiative as an opportunity for payment resilience and fair competition, especially against the private duopoly Visa and Mastercard. They expect an introduction at the earliest in 2028 or 2029.
The current parliamentary rapporteur, Fernando Navarrete (EPP), is considered an experienced Spanish central banker—but also a vocal critic of the digital euro. He repeatedly questions whether such an experiment is necessary at all. However, under pressure from other political groups such as the Social Democrats and the Greens, as well as the European Central Bank (ECB), he has now organized around ten seminars on the topic with other MEPs and stakeholders. His draft report, expected by October 24, is now eagerly awaited.
According to Damian Boeselager (Volt), who is co-negotiating the dossier for the Greens group, Navarrete is likely to propose a conditionality: the digital euro should only be introduced if private initiatives such as the European Payment Initiative (EPI) do not achieve sufficient market coverage in the 27 EU countries. The EPI was launched to strengthen a European payment infrastructure that is resilient, universal, and usable across borders at good conditions. $(LB3346872:Initially, it did not achieve these goals|_blank), but in light of the plans for the digital euro, it is facing a revival.
Overall, Boeselager sees progress. The vote in the lead parliamentary committee for Economic and Monetary Affairs (ECON) is planned for May 5, 2026, and in the plenary for mid/late May. If the Council of Ministers takes a position as planned by the end of this year, the final negotiations with the people’s representatives and the Commission in the so-called trilogue could be concluded by the end of 2026. The digital euro could be ready for use two to three years later if the ECB continues to lay the technical groundwork in advance—without an actual legal basis.
Pros and Cons: Sovereignty, Competition, and Privacy
Pro-arguments for the digital euro primarily focus on the sovereignty and resilience of European payment transactions. The current high dependence on US systems like Visa and Mastercard, which process around 12 percent of the EU’s gross domestic product, harbors risks. This is demonstrated by the examples of Russia and US sanctions against the International Criminal Court. A public system is intended to counter this duopoly with an open, competitive system and reduce merchant fees, which are high for credit cards.
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Another important aspect is inclusion for EU citizens without their bank account, who would be increasingly excluded from social life. Furthermore, public infrastructure could promote innovation. The digital euro also offers advantages in terms of privacy, as the ECB, unlike Visa and Mastercard, would not collect comprehensive payment information.
Resistance comes primarily from commercial banks, who feel sidelined and fear competition with a public system and the high programming effort. The $(LB4853265:retail sector has a different view|_blank). The ECB itself is vehemently lobbying for the digital euro and surprises with constantly new ideas.
Dispute over potential abolition of cash
The EU Commission’s proposals envision two forms: an offline euro, similar to the not very successful Geldkarte, would allow loading up to 300 euros onto a device and exchanging it in close proximity. This is intended to resemble cash and ensure full privacy. For the online euro, banks would have to set up a new “line” on the normal account for digital euros for each user.
The planned status as legal public tender, which everyone must accept, would, according to Boeselager, ensure immediate market penetration without individual contracts. This would be offset by the need for high public funding. An alternative, less complex model, which the Greens’ shadow rapporteur favors: the ECB could merely provide the so-called settlement infrastructure in the form of the Digital Euro Service Platform (DESP). This would resolve the sovereignty issue without citizens having to hold balances in digital euros. They could transfer payments directly from their account, as with Klarna or credit cards, without creating a “stock” of digital coins on it.
Boeselager dismisses the fear of abolishing cash as a “conspiracy theory” and an emotional issue that is particularly instrumentalized by the AfD. The Commission has made it clear with its proposal: the digital euro is not intended to replace cash but to strengthen its acceptance.
The amount of the holding limit is likely to be proposed by the ECB, and the regulatory requirements for it will be set by the member states in the Council. The range currently extends between 800 euros and 10,000 euros – $(LB3056319:a limit of 3000 euros is primarily being discussed|_blank). For Boeselager, one thing is clear: it must be ensured that the instrument offers real added value, is easy to use, and reduces merchant fees.
(kbe)
