STRASBOURG, FRANCE / RankWire.AI / – The European Parliament backed talks with EU member states on a proposed digital euro on Thursday, moving the legislation into interinstitutional negotiations. Lawmakers approved the main negotiating mandate by 416 votes to 169, with 22 abstentions. By a show of hands, they also endorsed rules for providers based in non-euro EU countries. The vote authorizes negotiations but does not create the digital currency or approve its issuance.
The plenary decision followed challenges to committee votes taken on June 23. The European Parliament’s Economic and Monetary Affairs Committee had approved mandates for the main regulation and the related provider measure. Fernando Navarrete Rojas, Parliament’s rapporteur, will lead its negotiating team. A first round is scheduled with the Irish presidency of the Council of the European Union. A separate proposal on the legal status of cash was not challenged and can also proceed to negotiations.
Under Parliament’s position, the European Central Bank would issue the digital euro as electronic central bank money. People could use it for online and offline payments, including transactions without an internet connection. The digital euro would complement banknotes and coins rather than replace them. Banks and other supervised payment providers would distribute the currency. Providers in non-euro EU states could also offer digital euro services under the related proposal.
Consumer access and privacy rules
Parliament’s mandate includes privacy safeguards and limits on the personal data needed to process transactions. Basic consumer services would carry no charge. These services include opening an account, holding funds, managing the balance and accessing at least one payment instrument. Most businesses that already accept digital payments would also accept the digital euro. Exceptions would cover self-employed workers and small or micro businesses that do not take other forms of electronic payment.
The proposal would place a cap on each person’s digital euro holdings to protect financial stability. The European Central Bank would set the limit within the legal framework agreed by lawmakers. The wider single currency package also addresses cash access across the euro area. Member states would monitor whether people can obtain cash and use it for payments. The rules give particular attention to older people, low-income residents and people outside the traditional banking system.
Council position sets basis for negotiations
The Council of the European Union adopted its negotiating position in December 2025. Its text supports online and offline use, privacy protections and free mandatory services for consumers. It also calls for holding limits and a framework for fees paid to payment providers. Merchant and interchange charges would face caps during a transition period. The Council’s cash proposal requires governments to monitor acceptance and access while preparing measures for major disruptions to electronic payments.
The European Commission proposed the digital euro legislation in June 2023. The European Central Bank has continued technical work while the legislative process advances. It plans a 12-month pilot starting in the second half of 2027 with selected payment providers, merchants and Eurosystem staff. The ECB aims for technical readiness during 2029 under a timetable that assumes adoption of the regulation in 2026. Its Governing Council will decide separately whether and when to issue the digital euro.