Key facts
- The European Parliament and EU governments are entering the final negotiation phase for the digital euro.
- Key sensitive issues include how fees will be shared and how banks and payment providers will be compensated.
- The digital euro would be an electronic form of central bank money issued by the ECB, complementing cash and existing services.
- Consumers could hold digital euros in a dedicated wallet with a holding limit.
- The system aims to support online and offline payments with a high degree of privacy.
- The ECB would provide infrastructure, while commercial banks and payment providers would offer services.
- Final approval is expected by the end of the year, with retail availability targeted for 2029 after a 2027 pilot program.
The European Parliament and EU governments are entering the final stages of negotiations regarding the digital euro, a proposed electronic form of central bank money. The discussions are focused on resolving sensitive issues such as the sharing of fees and the compensation models for banks and payment providers involved in offering the service.
The European Parliament has solidified its negotiating stance, paving the way for talks with member state governments. The digital euro is envisioned as a complement to existing cash and banking services, not a replacement. It would allow consumers to hold digital euros in a dedicated wallet, subject to an as-yet-undetermined holding limit, and would support both online and offline transactions with a focus on user privacy.
The European Central Bank would supply the underlying infrastructure, while private financial institutions would manage customer-facing services. A significant point of contention is the compensation model, determining which institutions receive payments and how much for providing digital euro services. The sharing of fees across the payment chain, with expectations of lower costs for merchants compared to card transactions, is also a key negotiation topic.
Intensive negotiations are anticipated in the autumn, with the goal of achieving final approval by the end of the year. Following a pilot program set to commence in 2027, the digital euro is projected to become available for retail payments by 2029.