EU governments agreed their negotiating position on 19 December 2025, allowing formal talks with the Parliament to begin on a regulation that would create the legal framework for a retail central bank digital currency alongside banknotes and coins.
The proposed “digital euro” would be available to the public and businesses for payments across the euro area, and would be distributed through payment service providers rather than directly by the ECB. The Council position backs both online and offline use, and frames the project as a resilience measure for the euro area’s payments infrastructure.
The Parliament’s work is being led in the Economic and Monetary Affairs Committee (ECON) by Fernando Navarrete Rojas, who took over as rapporteur after Stefan Berger stepped down in December 2024. In a legislative status note published by the Parliament’s research service, the draft report presented to ECON on 5 November 2025 is described as departing from the Commission’s original design in several key areas, including a sharper split between offline and online models and more prescriptive limits on holdings.
Under the rapporteur’s approach, the offline digital euro would be established immediately as a tokenised, device-to-device instrument intended to replicate cash-like attributes, including use during network disruptions. The online version — an account-based system settling via ECB-run infrastructure — would be introduced only if the Commission, after an investigation phase, concluded that no suitable pan-European sovereign retail payment solution existed.
Privacy is a central fault line. The ECB has argued that an offline function can offer a “cash-like level of privacy” because transactions would not involve sharing personal transaction data with payment service providers, the Eurosystem, or supporting service providers. Opponents in the Parliament have raised concerns about surveillance risks and the scope for data collection if online payments are routed through intermediaries, while supporters say legal design choices can hardwire privacy protections and limit what data is processed.
Cost is the other major argument. Estimates differ sharply. The Financial Times reported ECB estimates of around €6 billion, while citing PwC work putting costs far higher; Reuters has previously reported PwC estimates in the tens of billions of euros. Banks, which would be expected to provide consumer-facing services such as wallets and onboarding, have warned about implementation costs and the risk that customers shift deposits into central bank money in periods of stress.
To address financial stability concerns, the Council text provides for limits on how much can be held in online accounts and wallets, set by the ECB within an overall ceiling agreed by governments and reviewed at least every two years. ECB officials and media reporting have discussed a holding cap in the region of €3,000 per person, though final levels would be determined in the legislation and subsequent rule-setting.
The Parliament’s draft report seeks to shift parts of that decision-making away from the ECB. The legislative note says the rapporteur proposes that the Commission would set holding ceilings through delegated acts, drawing on an ECB report assessing financial-stability implications, and that upward revisions would require a new legislative proposal.
Fees and the economics of acceptance are also under negotiation. The Council position states that payment service providers may not charge consumers for certain mandatory services, such as opening and closing digital euro accounts or executing basic transactions, though it allows fees for added-value services. On merchant charges, it envisages a transitional period of at least five years in which interchange and merchant service charges are capped by reference to comparable payment methods, moving thereafter to cost-based caps.
The political arithmetic in the Parliament remains uncertain. Recent reporting has described support concentrated among centre-left and liberal groups, without a standalone majority, while the centre-right is split and far-right groups have criticised the project on privacy and cost grounds.
The timetable now depends on how quickly ECON can consolidate amendments and whether the Parliament can settle a negotiating mandate for talks with the Council. A trade association briefing has suggested committee discussions in late January 2026 and a possible plenary vote in early May 2026, though the Parliament has not fixed a final date publicly.
On the ECB side, the institution says its preparation phase ran from November 2023 to October 2025, and that it is now advancing technical work while supporting the legislative process. The ECB has stated that if lawmakers adopt the regulation during 2026, the digital euro could be issued during 2029, with a pilot exercise planned to begin in 2027.
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