The European Parliament’s Economic and Monetary Affairs Committee approved draft digital euro legislation on June 23, clearing one of the most significant political hurdles the project has faced since its inception. The vote sets the stage for trilogue negotiations between the European Parliament, EU member states, and the European Commission, with all three institutions aiming to finalize adoption by the end of 2026.
The approved legislation lays out a comprehensive blueprint for how a digital euro would function in practice. Both online and offline versions are mandated, with the offline variant designed to mirror the privacy characteristics of physical cash.
Distribution won’t be handled solely by the ECB. Instead, the framework envisions a layered system involving banks, payment service providers, e-money institutions, and, notably, regulated crypto asset firms. That last category is a quiet but meaningful inclusion. Crypto firms operating under MiCA (the EU’s Markets in Crypto-Assets regulation) would be eligible to serve as distribution channels for a central bank digital currency.
The framework also imposes holding limits on individual digital euro wallets, though specific cap amounts have not been publicly detailed at this stage. The digital euro will be non-interest-bearing, a deliberate design choice meant to prevent it from competing with bank deposits for savings. Merchants would be required to accept it as payment, putting it on functionally equal footing with physical cash.
