Digital euro regulation in final negotiations

The digital euro regulation is a proposed EU law that would create a digital form of the euro, issued by the central bank and available to the general public. The Commission proposal (external site) sets its legal tender status, how payment service providers distribute it, how it is used and its main technical features.

Its stated objectives include keeping central bank money with legal tender status available to the public, protecting privacy in digital payments and maintaining financial stability (EUR-Lex (external site)).

Today the public holds central bank money only as banknotes and coins; digital payments use money held at commercial banks. Under the proposal, the digital euro would be a new form of central bank money alongside cash, with mandatory acceptance at full face value (EUR-Lex (external site)).

Payment service providers, such as banks and payment institutions, would distribute it. Basic services would be free for individuals, and the merchant service charge would be the only charge per transaction that providers may apply to merchants (EUR-Lex (external site)).

That charge is capped at the lower of two amounts: the relevant costs plus a reasonable margin, or the fees for comparable digital means of payment. As an example only, with costs plus margin at 0.3 percent and comparable fees at 0.5 percent, the cap would be 0.3 percent (EUR-Lex (external site)).

The ECB would set holding limits to stop the digital euro being used as a large store of value. The Council position places these limits under a ceiling fixed by the Council and reviewed at least every two years (Council (external site)). The digital euro would bear no interest and would not be programmable money (EUR-Lex (external site)).

The proposal places duties on banks and payment institutions that distribute the digital euro or serve merchants who accept it (EUR-Lex (external site)). The roles most directly concerned:

• Payments Operations Analyst: processes digital euro funding, defunding and payments next to card and instant payments.
• ALM Analyst: models the effect of holding limits on deposit funding and the balance sheet.
• Liquidity Risk Analyst: adds conversions of deposits into digital euro to liquidity stress scenarios.
• Merchant Acquiring Sales Executive: prices digital euro acceptance under a capped merchant service charge.
• Cash Management Product Manager: designs the basic digital euro services that the proposal makes free for individuals.

The Council agreed its negotiating position on 19 December 2025 (Council (external site)). The European Parliament adopted its negotiating mandate on 9 July 2026, by 416 votes to 169 with 22 abstentions (Banca d'Italia (external site)).

A trilogue between Parliament, Council and Commission followed. A Council working document of 4 September 2026 updates the Member States on the progress of these negotiations (Council (external site)).

The stated institutional objective is to complete the legislative process by the end of 2026, so that date is marked expected (Banca d'Italia (external site)). After adoption, the ECB decides whether to issue; the Eurosystem names 2029 as a possible first issuance (ECB (external site)).

No EU regulation yet provides for a digital form of central bank money for the public. The Commission tabled the proposal on 28 June 2023, with a companion proposal on the legal tender of euro cash (EUR-Lex (external site)).

A third proposal covers providers established in Member States outside the euro area that distribute the digital euro (EUR-Lex (external site)). In parallel, the ECB has selected 36 providers for a pilot planned for the second half of 2027 (ECB (external site)).