The European Parliament's Economic and Monetary Affairs Committee on June 23 backed the legal framework for a digital euro, voting 43 to 14 with one abstention. The vote, which also orders negotiations with EU member states, ends roughly three years of wrangling between central bankers and the commercial banking industry over how — and whether — to build the bloc's first official digital cash.
The committee step is a milestone, not a finish line. Parliament is expected to confirm the position in a plenary vote in early July, after which lawmakers, member states and the European Central Bank must reconcile their positions in "trilogue" talks, aiming for a final deal before year-end. No money has been issued, and the law is not yet adopted.
What a digital euro is
A digital euro would be a central bank digital currency, or CBDC: electronic money issued directly by the ECB, the digital equivalent of physical banknotes. Unlike the balance in a commercial bank account — a claim on a private lender — a digital euro would be a direct claim on the central bank, available to ordinary people for everyday payments. It is distinct from privately issued stablecoins, which are crypto tokens pegged to a currency.
The approved text envisions both online and offline versions by 2029, with a roughly 12-month pilot involving selected merchants. The currency would be non-interest-bearing, and the ECB has said it would not be able to directly identify users from payment data, crypto.news reported. Offline payments are designed to offer cash-like privacy.
The disintermediation fight
The most contested design choice is the holding limit — a cap on how much digital euro any one person could keep. The fear, voiced by commercial banks, is "disintermediation": if households shift deposits out of banks and into central-bank money, lenders lose the cheap funding they rely on to make loans. A cap is meant to keep the digital euro a payment tool rather than a savings vehicle. The ECB has tested hypothetical limits of up to about €3,000 per person, discussed in research on the project, though the final figure has not been set. How banks would be compensated for distributing it remains one of the thorniest open questions heading into talks.
Why Europe wants it — and why the US said no
EU officials, including ECB President Christine Lagarde, frame the digital euro as a matter of strategic autonomy. Visa and Mastercard handle about 61% of card payments in the euro area and nearly all cross-border transactions, and Brussels is wary of dependence on US payment networks and dollar-pegged stablecoins.
The move sharpens a transatlantic split. As Boursel has reported, the US Senate on June 22 passed a housing bill, 85-5, that bars the Federal Reserve from issuing a CBDC through 2030, with backers casting a retail digital dollar as a surveillance risk. Europe is building the very instrument Washington has chosen to block — a divergence that will shape how the world's two largest Western economies move money for years to come.
