EU Parliament Committee Advances Digital Euro Payment Framework

Committee backs the digital euro package

On June 23, 2026, the European Parliament’s Economic and Monetary Affairs Committee adopted its position on legislation establishing a digital euro.

The main digital euro proposal was approved by 43 votes to 14, with one abstention. Two related files covering distribution in non-euro EU countries and continued access to physical cash were also approved.

The committee vote does not mean that the digital euro has received final legislative approval. The negotiating mandates are expected to be announced at the beginning of the European Parliament’s July plenary session, after which the final legislation will need to be negotiated with the Council.

The proposal forms part of a wider European effort to make central bank money available in digital form and reduce dependence on payment infrastructure operated by non-European providers.

How the proposed digital euro would work

The digital euro would be issued by the European Central Bank and designed to complement banknotes and coins rather than replace them.

Under the committee’s position, it would support two payment modes:

• Online payments would use an account-based system connected to the digital euro infrastructure.
• Offline payments would be stored locally on a user’s device and could be transferred without an active network connection.

The offline model is intended to operate more like physical cash. If a device containing offline digital euros were lost, the stored balance might not be recoverable.

This distinction matters for merchants and payment providers. Online transactions would depend on account infrastructure, authentication and payment connectivity, while offline payments would require separate controls for device security, transaction limits and double-spending risks.

Privacy safeguards remain central

Privacy has been one of the most closely watched parts of the digital euro debate.

The committee’s position calls for privacy-by-design and privacy-by-default protections. Technologies such as zero-knowledge proofs could be used to verify transactions without exposing more personal information than necessary.

The European Parliament also states that the ECB should not have access to users’ personal identification data.

For payment providers, privacy requirements will affect how customer information, transaction records, fraud controls and regulatory reporting are separated across the payment chain.

The final implementation will still need to balance payment privacy with anti-money-laundering, sanctions and financial-crime obligations.

Banks and PSPs would distribute the digital euro

The ECB would issue the digital euro, but regulated payment providers would remain responsible for distributing it to users.

The proposed distribution model could include:

• Banks
• Electronic money institutions
• Post offices
• Other regulated payment service providers
• Regulated crypto-asset service providers

Payment providers established in EU countries that do not use the euro could also be allowed to distribute digital euro services, subject to the same framework and additional national oversight.

This structure keeps commercial payment providers involved in onboarding, wallets, payment instruments, customer support and transaction management.

The digital euro would therefore create an additional payment rail rather than remove the role of banks and payment service providers.

Most merchants could be required to accept it

Under the committee’s position, most businesses would be required to accept digital euro payments.

Exceptions could apply to self-employed businesses and small or micro-enterprises that do not already accept other digital payment methods. Temporary refusal could also be permitted under specific conditions, such as a power outage or technical disruption.

Basic consumer services—including opening an account, holding funds, managing the balance and receiving at least one payment instrument—would be free of charge.

Merchant fees and fees between payment providers would be capped. Offline digital euro transactions would be free of payment charges under the current proposal.

For merchants, mandatory acceptance could create new requirements across:

• Checkout integration
• Payment routing
• Refund processing
• Transaction reconciliation
• Customer support
• Fraud and dispute controls
• Online and offline payment continuity

The exact operational burden will depend on the technical rulebook and the final fee structure.

Holding limits aim to protect financial stability

The proposal would limit how many digital euros an individual could hold.

The European Commission would set the EU-level ceiling based on recommendations from the ECB, with the limit reviewed at least every two years.

Businesses would generally not be permitted to maintain digital euro balances. They could temporarily accumulate incoming payments for up to 24 hours before the funds were transferred into another account.

The digital euro would not pay interest or charge negative interest.

These restrictions are designed to prevent large movements of deposits away from commercial banks while still allowing the digital euro to function as an everyday payment method.

A phased rollout would follow final approval

Before launch, the ECB would be expected to complete the scheme rulebook, build the required infrastructure and carry out real-world pilot testing.

The pilot phase would need to examine issues such as:

• Offline transaction risks
• Double-spending prevention
• Liability allocation
• Wallet and device security
• PSP interoperability
• Merchant acceptance
• Consumer education

Once authorised, the proposal calls for a rollout period of at least 24 months so that banks, payment providers, merchants and users can prepare.

What it means for merchants and payment providers

The digital euro is still moving through the legislative process, and its final technical and commercial model may change.

However, the committee vote gives merchants and payment providers a clearer view of the direction under consideration.

The central issue is no longer only whether Europe will issue a digital form of central bank money, but how it will connect with existing wallets, banks, PSPs and merchant payment systems.

Businesses operating in Europe may eventually need to evaluate how digital euro acceptance would affect checkout design, settlement, reconciliation, refunds, fraud controls and payment-provider relationships.

For cross-border merchants, interoperability will be especially important. A payment method may be available throughout the euro area, but businesses will still need consistent order status, transaction reporting and settlement workflows across different countries and payment channels.