Key facts
- The EU is entering final negotiations on the digital euro, focusing on fees and bank compensation.
- ECB President Christine Lagarde affirmed the digital euro will complement, not replace, cash and will not be used for payment monitoring.
- The European Parliament has approved its negotiating mandate for the digital euro legislation.
- The digital euro aims to enhance Europe's payment sovereignty, as many current transactions rely on foreign-owned infrastructure.
- Final approval of the digital euro legislation is anticipated by the end of 2026.
- A pilot program is slated for 2027, with retail availability targeted for 2029.
The European Union is advancing towards the final stages of negotiations for a digital euro, with European Central Bank President Christine Lagarde emphasizing that the digital currency will complement, not replace, cash and will not be used for payment monitoring.
The European Parliament has approved its negotiating mandate, moving the legislation closer to adoption by the end of 2026. Months of stalled talks preceded this development, with initial criticisms focusing on potential privacy concerns and the diminished role of physical cash.
Lagarde stated that the digital euro is intended to bring public money into the digital age and enhance Europe's strategic autonomy in payments. She highlighted that a significant portion of card payments in Europe rely on infrastructure controlled by foreign capital, underscoring the need for a European-based solution.
Key negotiation points include the sharing of fees and compensation models for banks and payment providers. The digital euro would have legal tender status, similar to banknotes, and would be supported by ECB infrastructure, with private institutions managing customer-facing services. A pilot program is scheduled for 2027, with retail availability targeted for 2029.