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The long-debated project to create a digital euro has taken a significant step forward after European policymakers reached a long-awaited consensus on how to set customer holding limits.
Digital Euro gains momentum
European Central Bank (ECB) Executive Board Member Piero Cipollone described the agreement as a “major breakthrough” that injects fresh momentum into the initiative.
Speaking at Bloomberg’s Future of Finance event in Frankfurt on 23 September, Cipollone suggested that the eurozone’s central bank digital currency (CBDC) could be rolled out by the middle of 2029, provided legislation progresses on schedule.
The European Parliament is due to receive an update on the project on 24 October and could hold a decisive vote on enabling legislation by May 2026.
A Breakthrough
The breakthrough follows agreement among EU finance ministers on a roadmap for the digital euro, addressing widespread concerns that a new form of central bank money could trigger deposit flight from commercial banks.
Policymakers hope that strict holding limits will safeguard financial stability while ensuring broad usability for consumers.
The push has also been shaped by geopolitical dynamics.
Earlier this year, Cipollone warned that US President Donald Trump’s vocal support for dollar-pegged stablecoins heightened the urgency of developing a European alternative.
Pierre Gramegna, Managing Director of the European Stability Mechanism, has similarly cautioned that Europe’s monetary autonomy could be undermined if dollar-linked digital assets gain global dominance.
ECB Vs Digital Euro
For the ECB, the digital euro is not intended to replace cash but to complement it, offering an additional payment option that is universally accessible, secure and resilient.
“In an increasingly digital world exposed to new geopolitical and operational risks, we must protect the euro’s availability for all Europeans at all times,” Cipollone said earlier this month.
Merchants, however, are pushing for clarity on how the digital euro will function in practice.
At a Bundesbank event on 24 September, EuroCommerce Director General Christel Delberghe urged lawmakers to prioritise a streamlined, merchant-friendly framework.
She argued that retailers, who handle over 250 million transactions daily across the EU, need a low-cost, dependable solution that reduces reliance on non-European payment providers.
EuroCommerce has laid out a series of recommendations, including a uniform four-cent cap on merchant service charges, offline wallet functionality to encourage consumer uptake, and a phased rollout starting with in-store and e-commerce payments.
It also advocates allowing merchants to hold digital euro balances to simplify supplier payments and reusing existing infrastructure to avoid costly duplication.
The Stakes are High
For Europe’s retail sector, the stakes are high.
Rising card scheme fees, coupled with the growing influence of PayPal and Buy Now Pay Later providers, have increased payment costs for merchants.
A digital euro, if designed correctly, could reduce these costs while reinforcing Europe’s strategic autonomy.
The coming months will be pivotal.
As the ECB and legislators refine both the technical design and the regulatory framework, the challenge will be to balance consumer protection, financial stability and merchant demands.
Success could see the eurozone join the growing ranks of economies deploying digital currencies – but failure could leave Europe more dependent than ever on foreign-controlled payment rails.
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