The European Parliament has approved the opening of negotiations with member states on the digital euro, a new electronic form of central bank money intended to loosen the European Union’s reliance on American payment providers.
Meeting in Strasbourg on July 9, 2026, MEPs backed the negotiating mandate by 416 votes to 169, with 22 abstentions. A separate mandate covering payment providers based outside the eurozone was approved by a show of hands.
The plenary vote was necessary because the European Conservatives and Reformists, Patriots for Europe and Europe of Sovereign Nations groups had challenged the decision taken by Parliament’s economic and monetary affairs committee on June 23, 2026 to move straight to inter-institutional talks.
A third file in the same single currency package, on the legal tender status of euro banknotes and coins, was not contested.
The digital euro would be issued and backed by the European Central Bank and distributed through banks and other payment service providers, including those established in member states outside the eurozone. Most merchants would be obliged to accept it.
Self-employed workers and small and micro-enterprises that take no other electronic payments would be exempt from that obligation.
Parliament’s position is that basic services, such as opening an account, holding funds and access to a payment instrument, should be free for consumers, while the costs borne by retailers should not exceed what they already pay for other electronic methods.
MEPs also want a ceiling on how many digital euros any one person may hold, to prevent a large-scale flight of deposits from commercial banks. The currency would not bear interest and could not serve as a savings vehicle.
The proposal would allow payments both online and offline. Offline transactions would be processed directly between devices, and MEPs argue that so-called zero-knowledge proofs would let payments be verified without personal data being revealed.
According to ECB figures, Visa and Mastercard handle 61 per cent of card payments in the euro area and almost all cross-border card transactions.
The Parliament’s negotiating team is led by rapporteur Fernando Navarrete Rojas, a Spanish MEP from the European People’s Party. He said the digital euro would “complement cash, not replace it” and rejected claims that it would allow payments to be monitored.
Talks will run in parallel on a linked regulation obliging eurozone countries to guarantee access to cash, stop shops refusing notes and coins and monitor availability for elderly, low-income and unbanked people.
Negotiators are aiming for a deal by the end of 2026. Any launch would then rest with the ECB, which has pencilled in a pilot for 2027 and retail availability from 2029.
