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ECB's digital euro faces uphill battle in EU parliament
Published by Global Banking and Finance Review
Posted on September 4, 2025
4 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on September 4, 2025
4 min readLast updated: January 22, 2026
The ECB's digital euro proposal faces resistance in the EU Parliament due to concerns about banking impacts and privacy. Legislation is delayed until mid-next year.
By Francesco Canepa and Jan Strupczewski
FRANKFURT/BRUSSELS (Reuters) -The European Central Bank's plans to issue a digital euro face an uphill battle in the European Parliament as some lawmakers fear it will upend the banking sector, violate citizens' privacy and stifle innovation.
The ECB renewed its pitch for a digital currency - essentially an online wallet guaranteed by the central bank - before lawmakers on Thursday.
The central bank's board member Piero Cipollone presented it as a backup payment option if euro zone banks come under cyberattack or U.S. President Donald Trump's administration weaponises its country's dominance in credit cards and stablecoins.
"The digital euro will ensure that all Europeans can pay at all times with a free, universally accepted digital means of payment, even in case of major disruptions," Cipollone told a committee of the European Parliament.
But lawmakers gave the proposal, which has been stuck in Parliament for more than two years and much longer than the ECB had anticipated, a mixed reception.
Some fear a risk-free account would drain deposits from commercial banks and, even if the ECB set a cap on individual accounts, it could come under pressure to lift it in a crisis.
"Isn't it a problem that we don't really have control over the ceiling?," asked Pierre Pimpie, a lawmaker for the right-wing Patriots for Europe Group.
Cipollone said the ECB would set that cap based on "rigorous analysis" and, in a crisis, financially savvy individuals would anyway be able to take their money out of the euro via U.S. stablecoins, which are crypto tokens pegged to an official currency.
Others raised concerns about the privacy of digital payments, the remuneration of companies that will be distributing the single currency and the risk of displacing private sector solutions.
Cipollone said physical cash won't disappear and the digital euro's open standards could be used by the private sector to roll out more sophisticated services. Issuing banks will anyway be compensated for their services, he added.
SLOW PROGRESS
Cipollone said he hoped to have the necessary legislation in place by June, pushing further back expectations that had originally been for this autumn.
But little has happened since the European Commission, one of the three institutions that have to give their go-ahead along with the European Parliament and the European Council of EU governments, formulated its initial proposal in 2023.
In a hopeful sign for the ECB, several lawmakers apologised to Cipollone for the delay.
But Fernando Navarrete Rojas, the centre-right parliamentarian in charge of producing a report on the digital euro that forms a basis for the parliamentary debate, remained negative.
"Rather than acting as a targeted remedy, the digital euro risks becoming a solution in search of a problem," Navarrete said in an opinion piece published this week.
He added he was only open to a digital euro as a "Plan B" if no private initiative emerges and only provided that safeguards are in place in terms of financial stability and privacy, among other conditions.
Navarrete was expected to submit his report in the coming weeks and put it up for parliamentary debate and amendments.
Once both the Parliament and the Council have each agreed on their own positions, talks will start between the three European institutions, which are likely to take several months.
This meant that a vote on the digital euro may only take place towards the middle of next year at the earliest.
"A vote sometime in spring or early summer next year sounds like a plausible timeline," Markus Ferber, another member of the parliamentary committee on economic and financial affairs for the European People's Party, told Reuters.
Once the law is in place, the ECB estimates it will need between two and a half and three years to build out the necessary technology, Cipollone said.
(Reporting By Francesco Canepa; editing by Balazs Koranyi and Hugh Lawson)
The digital euro is intended to serve as a backup payment option, ensuring that all Europeans can pay at all times with a universally accepted digital means of payment, even during major disruptions.
Lawmakers are worried that a risk-free account could drain deposits from commercial banks and raise privacy concerns regarding digital payments and the impact on private sector solutions.
The ECB hopes to have the necessary legislation in place by June, but a vote on the digital euro may not occur until the middle of next year at the earliest.
Once the law is in place, the ECB estimates it will take between two and a half to three years to build out the necessary technology for the digital euro.
Cipollone stated that physical cash will not disappear and that the digital euro's open standards could be utilized by the private sector to develop more sophisticated services.
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