On Friday 31 October Agence Europe obtained a copy of the European Parliament’s draft report, prepared by Fernando Navarrete Rojas MEP (EPP, Spanish), on the European Commission’s proposal for a regulation aimed at establishing a legal framework for the introduction of a European digital currency issued and managed by the European Central Bank (ECB).
The text, reworked by Mr Navarrete Rojas, significantly changes the Commission’s approach, reflecting a more cautious and gradual vision of the future digital euro. The rapporteur describes the response as “nuanced, realistic and updated”.
The MEP proposes that the introduction of the digital euro should start with an ‘offline’ version, designed ‘by replicating cash-like features’, before any ‘online’ deployment.
According to a new text added by the rapporteur, “establishment (...) initially start with the ‘offline’ digital euro, since its use would strengthen the resilience of the payment system, reduce overdependence on payment solutions and technologies under the ultimate control of third countries and preserve citizens’ privacy concerns”.
Mr Navarrete Rojas believes that the introduction of the ‘online’ digital euro should be “contingent on the absence of a pan-European sovereign retail payment solution covering person-to-person, point-of-interaction and e-commerce use cases in the euro area”.
The amendments aim to avoid head-on competition with market players and to preserve the stability of the banking system. In particular, the former Bank of Spain executive is asking the ECB to assess, “in close cooperation with the European Systemic Risk Board”, the impact of different holding limits, whereas the Commission was content to give it the power to set one, if necessary, without making it an obligation.
“In order to safeguard financial stability and prevent structural disintermediation risks in the banking sector in the euro area, the holdings of digital euro by natural persons should be subject to quantitative limits. Those limits should ensure that the introduction of the digital euro does not trigger significant outflows of retail deposits or undermine the capacity of credit institutions to provide credit to the economy”, suggests another amendment by the rapporteur.
On Friday, a source confirmed to Agence Europe that the Danish Presidency of the Council of the EU had initiated in-depth discussions with EU Member States the previous day on the issue of a detention ceiling, a sensitive point in the dossier.
Reaction from the Social Democrats. According to MEP Matthias Ecke (S&D, German), the draft text is likely to put a major brake on progress on the project. “Demanding that a private solution fail before authorising the introduction of the digital euro is tantamount to deliberately slowing down the work of the European Central Bank. (...) It should be introduced as soon as these conditions are met - not when the banks want it”, he said in a press release on Friday.
ECB support for legislative work. On Thursday, when the ECB gave the go-ahead for a phase of ‘technical preparation’ and ‘legislative support’ for the introduction of the digital euro (see EUROPE 13742/3), one of the members of the ECB’s Executive Committee, Piero Cipollone, assured, in a letter to Aurore Lalucq, Chair of Parliament’s Committee on Economic and Monetary Affairs (ECON), that this decision “does not prejudge the outcome of the ongoing legislative process”.
“A decision on issuance will only be considered at a later stage, once the legislation has been adopted. The ECB remains ready to support the legislative work through technical input, and to further engage with the negotiating team to facilitate swift progress”, he added, detailing the main achievements during the ‘exploratory phase’ of designing the digital euro.
On Thursday, the ECB also published a report analysing the compatibility of the digital euro with existing payment solutions. The document reports on the work carried out in 2024 and 2025 by the ECB, its advisory body, the Euro Retail Payments Board, and stakeholders in the sector.
See the draft report by Mr Navarrete Rojas: https://aeur.eu/f/j90
See Mr Cipollone’s letter to Mrs Lalucq: https://aeur.eu/f/j93
See the ECB report: https://aeur.eu/f/j91 (Original version in French by Bernard Denuit)