MEPs in the European Parliament’s Economic and Monetary Affairs Committee have backed plans for a digital euro, setting out demands on privacy, fees and limits on how much individuals could hold.
The committee adopted its position on the proposed law to establish a digital euro by 43 votes to 14, with one abstention, the Parliament announced on Tuesday.
A digital euro would be an electronic form of money issued by the European Central Bank (ECB) and designed to work both online and offline.
Online payments would be processed through an account-based system, while offline payments would use local storage devices, with the offline feature described as comparable to cash because losing the device would mean losing the stored funds with no refund.
Privacy safeguards would be built into the design, including tools intended to verify transactions without revealing personal data, and the ECB would not have access to personal identification data.
Most businesses would be required to accept the digital euro, with exceptions for the self-employed and for small and micro enterprises that do not accept other digital payments.
Temporary refusals would also be allowed in specific situations such as power outages, while visitors and tourists — and, in some cases, people living outside the euro area — would be able to use it.
Fees, holding limits and cash rules
Basic services such as opening an account, holding and managing funds, and receiving at least one payment instrument would be free, the Parliament said.
Payment service providers — such as banks and e-money providers — could charge for extra services, while fees for merchants and between providers would be capped and offline payments would be entirely fee-free.
To protect the financial system, MEPs proposed a cap on how many digital euros an individual could hold, with the ceiling set at EU level by the European Commission based on ECB recommendations and reviewed at least every two years.
Businesses would be barred from holding digital euros, except to accumulate incoming payments for up to 24 hours, and the digital euro would not pay or charge interest.
The committee also backed separate proposals to tighten rules around euro banknotes and coins, including obligations on euro area countries to keep cash accessible and plan for digital payment disruptions.
Businesses would not be allowed to ban cash through “no cash” signs or standard contract terms, and member states would need to monitor cash availability with attention to groups such as the elderly, low-income people and the unbanked.
Fernando Navarrete Rojas, the Parliament’s rapporteur on the file, said the digital euro would “complement cash, never replace it”, and that “no one should be forced away from cash.”
Negotiating mandates for the three texts are due to be announced at the start of the July plenary session, with final legislation still to be agreed with EU governments in the Council before it can take effect.
