In 2026, EU lawmakers must approve the final legal framework. Without the adoption of these laws, the ECB will not be able to start issuing virtual currency. MEPs are trying to work out a compromise position on the digital Euro. To all appearances, so far without success.
Because of this, the legislative execution of the project has stalled, writes Euronews. An important vote is expected in the European Parliament in May, which will determine the technical details of the project.
The start of the first pilot projects and test transactions involving banks and payment systems is planned by mid-2027.
Features of the Digital Euro
The virtual twin is not a replacement for paper money, but its digital analog (“digital cash”) guaranteed by the Central Bank. In order not to destabilize the banking system, it is planned to introduce a storage limit – presumably from 3000 to 4000 Euros per person.
One of the main chips should be the ability to pay without the Internet, which will increase the level of privacy. The European Parliament is currently debating how to strike a balance between the convenience of payments and the protection of users’ personal data.
Lawmakers are still unable to agree on how the new mechanism of cashless payments will work. Attempts to harmonize the positions of different parties have been unsuccessful so far.
Disputes in the European Parliament
Different models sound different – rapporteur Fernando Navarrete from the European People’s Party (EPP), who oversees the work on the project in the European Parliament, has introduced a new proposal for e-cash or “electronic cash”.
According to him, the model would be used only for offline payments and as a “tokenized digital form” of cash, without providing users with retail accounts on the European Central Bank (ECB) register.
The Socialists and Democrats (S&D) and Renew Europe factions, on the other hand, support the European Commission’s proposal that Europeans would be able to hold accounts with the ECB and pay with digital Euros not only online but also offline.
“Europe must own and control its critical infrastructure. At a time of unprecedented geopolitical change, when we are witnessing the destruction of the foundations of the international order, payment sovereignty must be anchored in a common infrastructure,” said S&D speaker Nikos Papandreou.
The European Parliament is the only institution that has yet to take a position on the issue, while member states already did so last December.
A vote on the digital Euro is expected to take place in May at the EP plenary session, but disagreements among lawmakers could prevent the initiative from being adopted.
