The digital euro: what has actually been decided

The distinction that matters

Coverage of the digital euro routinely blurs three different things: what the European Central Bank has decided about its own preparations, what the Commission proposed as law, and what the Council and Parliament have since negotiated. As of 23 September 2026, only the first has been decided. The regulation that would actually create a digital euro is still a proposal in trilogue, not a text that binds anyone.

What is actually decided

The European Commission tabled its proposal for a Regulation on the establishment of the digital euro on 28 June 2023 (COM(2023) 369). It has no legal force until Parliament and Council agree an identical text and it is published in the Official Journal. The European Data Protection Board and the European Data Protection Supervisor adopted a joint opinion on the proposal on 17 October 2023, discussed below.

The ECB's own Governing Council has made real decisions about its preparations, which is a different question from whether a digital euro will exist. On 30 October 2025 the ECB announced that the Governing Council had decided to move the project to its next phase, following completion of the preparation phase that began in November 2023. That decision stands. It is not a decision to issue: the ECB states that the Governing Council's final decision on whether to issue a digital euro, and on what date, will only be taken once the legislation has been adopted.

On 19 September 2025 euro area finance ministers in the Eurogroup agreed political guidance on the procedure for setting a holding limit, that is, on how the number would be decided, not the number itself. That was political guidance, not legislation.

Where the legislative file stands

The Council agreed its negotiating position on the digital euro package on 19 December 2025. Parliament's Economic and Monetary Affairs Committee adopted its position on 23 June 2026, by 43 votes to 14 with one abstention, with Fernando Navarrete Rojas (EPP, Spain) as rapporteur. The committee decided to go straight to interinstitutional talks; the European Conservatives and Reformists, Patriots for Europe and Europe of Sovereign Nations groups challenged that decision and forced a plenary vote, which confirmed the mandate on 9 July 2026 by 416 votes to 169, with 22 abstentions.

The first trilogue was held on 13 July 2026, with the positions of each institution presented, and a second on 10 September 2026. According to the Irish Presidency of the Council, a third is scheduled for 30 September 2026. The institutions' stated aim is to finalise the legislation by the end of 2026. Nothing here is adopted: the Commission text is drafted, Council and Parliament each hold a negotiating mandate, and the negotiation is under way. None of it is in force.

Holding limits: neither the number nor the decision-maker is settled

Council and Parliament both support a cap on how much any one person can hold, so the digital euro works as a means of payment rather than a store of value competing with bank deposits. They disagree on who sets it. Parliament's position has the Commission set the ceiling based on ECB recommendations, reviewed at least every two years, with Parliament keeping full decision-making powers in the process. The Council's position, as Freshfields summarises it, prefers a Council implementing decision adopted by a reinforced qualified majority, keeping the choice with member states. No figure has been fixed. The ECB's financial-stability analysis examined hypothetical limits of up to €3,000 per person and concluded that the digital euro would not harm financial stability even under an extremely conservative crisis scenario. That is a tested assumption, not a decided limit.

The privacy design

The design keeps the Eurosystem out of identifying individual users. A supervised payment service provider, typically a bank, handles onboarding and the anti-money-laundering checks; the ECB says the Eurosystem would not be able to identify users making or receiving online payments. Parliament's June 2026 position adds zero-knowledge proofs, so that a transaction can be verified without exposing personal data, and states that the ECB would have no access to identification information.

The EDPB and EDPS opinion of October 2023 raised specific points about the Commission's text: the single access point for digital euro user identifiers, how personal data would be processed to enforce holding limits, and the foreseeability of the fraud-detection provisions. Those points belong to the drafting now in trilogue; no adopted text has yet settled them.

Banks and payment service providers

Supervised PSPs, principally banks, would be the route by which most people access a digital euro: onboarding, funding and defunding from a bank account, and applying the holding limit. The Eurosystem says it would bear the cost of the scheme and infrastructure, as it does for banknotes, and would not charge or benefit from transaction fees. The digital euro would be free for basic use by individuals.

Compensation for the PSPs that do the distribution work sits in Article 17 of the Commission's proposal, and it is among the least settled parts of the file. On 15 April 2026 negotiators from the EPP, ECR and S&D groups reached a preliminary agreement under which the Eurosystem would help fund banks' connection to the public infrastructure. S&D shadow rapporteur Nikos Papandreou said at the time that it was not yet in the final document, and preferred a "better-off" principle, under which the digital euro must offer merchants better terms than existing payment solutions, without depending on ECB funding. Council and Parliament also differ on how long the transitional fee model lasts: the Council wants it to end after ten years at the latest, while Parliament would let it continue while efficiency benefits persist.

Merchant fees would be capped under both positions. On 8 September 2026 Italy proposed, in the negotiations, a cap of €0.02 on merchant service charges for payments under €10, and said it was open to a zero fee. That is a member-state proposal, not an agreed text.

Banks have put a price on their side of the build. A study by PwC, commissioned by the European Banking Federation, the European Association of Co-operative Banks and the European Savings and Retail Banking Group and published in June 2025, surveyed 19 retail banks and extrapolated initial costs of about €18 billion across the euro area over four years, excluding running costs and offline functionality. The EBF said in April 2026 that participating banks had revisited those estimates and confirmed them.

Offline payments

The ECB's preparation-phase closing report found offline, device-to-device payments technically viable, settled by transferring cryptographically secured tokens directly between two devices, and identified embedded secure elements, integrated secure elements and eSIMs as viable hardware. The ECB says that in an offline payment only the payer and the payee would know the personal transaction details. Parliament's June 2026 position spells out the corollary: losing the device means losing the offline money, with no refund possible. It also makes offline payments entirely fee-free. The Council's position sets out its own rules for verifying offline payments, and the final treatment depends on the trilogue.

The timetable the ECB has committed to

The ECB's October 2025 decision assumes that co-legislators adopt the regulation in the course of 2026. On that assumption, a pilot exercise and initial transactions could take place from mid-2027, and the Eurosystem aims to be ready for a potential first issuance during 2029. The ECB's FAQ puts the pilot in the second half of 2027, running for 12 months. Parliament's position adds a roll-out period of at least 24 months after authorisation. The ECB estimates development costs of about €1.3 billion until first issuance and annual operating costs of about €320 million from 2029. These are planning assumptions for a project whose legal basis does not yet exist, not commitments that a digital euro will be issued.

What is still contested, and by whom

Inside the negotiation, the open questions are institutional: who sets the holding limit, whether legal persons may hold digital euro, how long the compensation model runs and how merchant fees are capped. Around it, three arguments run in parallel. Banks, through the EBF and its partner associations, have put their initial connection cost at about €18 billion. Within Parliament, the April 2026 compensation compromise was criticised by Pasquale Tridico (The Left, Italy), who called it an inappropriate public subsidy that would be difficult to explain to the public. And three groups on the right forced the July 2026 plenary vote to contest the committee's route into trilogue. Navarrete Rojas, as rapporteur, has said the digital euro will complement cash and never replace it, and rejected claims that it would allow payments to be monitored. Those are political positions; none has been resolved by adopted law.

Not the same project as wholesale CBDC or a stablecoin

The digital euro is retail central bank money for households and businesses. It is a separate project from the Eurosystem's work on settling tokenised interbank transactions in central bank money, covered in our piece on wholesale CBDC and tokenised settlement, which does not depend on this regulation. Nor is it a stablecoin: a digital euro would be a direct central bank liability, and the proposal would give it legal tender status, whereas the privately issued euro, sterling and franc instruments in our piece on non-dollar stablecoins are commercial instruments under a different legal regime.

This is not advice. Treasury or compliance planning premised on a digital euro should wait for an adopted text, not a negotiating position.