The digital euro moved closer to real negotiations after the European Parliament voted to open talks with EU governments on the law that would create a new electronic form of central bank money.
- The vote was 416 in favor, 169 against and 22 abstentions, according to a Parliament press release.
The vote doesn't launch the digital euro
But it lets Parliament enter negotiations with the Council of the European Union, the body representing member states, before any final law can be adopted.
But it lets Parliament enter negotiations with the Council of the European Union, the body representing member states, before any final law can be adopted.
Fernando Navarrete Rojas, a Spanish lawmaker from the center-right European People's Party, will lead Parliament's negotiating team. The first round of talks with the Irish presidency of the Council is expected soon.
- The European Commission proposed digital euro legislation in June 2023, but last year that progress had stalled amid skepticism from lawmakers and banks.
- The ECB has argued that dollar stablecoins and U.S. payment dominance make the project more urgent, while banks worry the digital euro could pull deposits away from them.
- Individuals would face a cap on how many digital euros they can hold, a safeguard meant to stop large deposit outflows from commercial banks. Reuters reported that ECB simulations showed a €3,000 cap could move as much as €700 billion from eurozone banks, equal to 8.2% of retail sight deposits.
- The ECB estimated setup costs at €4 billion to €6 billion over four years, while Parliament's plan keeps banks and payment firms central to distribution.
- Before the final launch, the ECB wants to run a 12-month pilot in the second half of 2027 and aims for a possible full launch in 2029, but that still depends on the law getting finished first.