Legislation is expected soon but launch remains years away with issuance unlikely before late 2020s.
On Friday, the EU finance ministers reached an agreement on the digital euro currency roadmap. The digital euro is envisioned as an alternative to the dominant Mastercard and Visa payment systems.
Europe wants to increase its independence in defence, finance, and energy. Due to this, discussions on the digital currency backed by the EU Central Bank have heated up lately. Furthermore, the European Central Bank is hoping to have the legislation ready soon. Once the legislation is ready, it will take another three years to launch the digital currency.
While some European countries do already have their own digital currency systems, those aren’t widely accepted across the bloc.
“The digital Europe is not just a means of payment, it is also a political statement concerning the sovereignty of Europe and its capacity to handle payment, including on a cross-border basis, with a European infrastructure and solution,” Lagarde said at the press conference.
The ECB has offered to give EU governments more control over key parts of a planned digital euro, seeking to end a year of gridlock and clear the way for an agreement on the project.
The move opened a route toward an agreement on a project that has been stuck for a year. It shifts a sensitive decision from the central bank toward elected national authorities. Under the plan, national governments would have the final word on how much digital euro a person can keep in a wallet simultaneously. The step is designed to address a core worry shared by several countries and by the banking industry.
According to a previous report by Cryptopolitan, the ECB said that the digital Euro needs to offer continued access to payments across the Eurozone even during severe banking crisis or cyberattacks.
Finance ministers are due to take up the idea this week in Copenhagen. Officials said an informal green light is possible. One diplomat said the proposal is “likely to pass.” The ECB, based in Frankfurt, is pushing for a quick sign-off. It fears that waiting too long will leave Europe behind US-based private payment providers, especially dollar-denominated “stablecoin” stablecoins that have gained traction for cross-border transfers.
Reinforced majority to decide digital Euro limits
The question of who gets to take the final decisions on the digital euro’s design has pitted EU capitals against the central bank for months. Since 2024, governments have requested to keep the last say on that ceiling.
They argue that if the threshold is set too high, people could pull large sums out of bank accounts into digital euro wallets, as much as they can withdraw cash from ATMs. This could potentially put financial stability at risk.
The new pitch seeks to split the difference. Two years before any issuance, the ECB would open a dialogue with governments. One year before issuance, the ECB would come up with an overall limit. That figure would then require backing by a qualified majority of eurozone governments.
Any later change to the cap would need an identical reinforced majority. That would give capitals more weight in shaping the rules. Officials stressed that the use of a reinforced qualified majority has the strongest vote count in EU procedures, and it is deliberate.
It would make it harder to push through a high ceiling without broad backing, and would also apply to any later revision suggested by the ECB after launch.
The Council seeks to reach an official compromise on the full digital euro regulation before year-end. The legislation also needs the approval of the EU Parliament, which is not expected to come before next year.
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