Last week, with barely a mention in the major media, European institutions took their first concrete step toward creating a digital euro.
The Economic and Monetary Affairs Committee of the European Parliament (ECON) voted 43 in favor, 14 against, and 1 abstention to approve its position on the so-called «Single Currency Package» — a bundle of three regulations. The most significant is the one that would establish the legal framework for a new digital currency issued directly by the European Central Bank (ECB).
As early as July 6–9, the full regulation is expected to go before a parliamentary plenary vote. Passage is widely assumed, given the numbers in committee. From there, the text will enter the notorious «trilogue» — the labyrinthine EU legislative process that involves the European Council and the European Commission.
The stated — and ambitious — goal: finalize the regulation by the end of 2026, launch a pilot project by 2027, and roll out the digital euro to the public by 2029.
What is the digital euro, and why does it matter?
To understand what’s at stake, it helps to step back and look at how payments actually work today.
When you pay with a debit card, a bank transfer, or a payment app, in the vast majority of cases you are not exchanging central bank money. You are moving bank deposits — your account balance is a credit claim against your bank, not currency issued directly by the ECB.
The real public money — known as the monetary base — consists of banknotes in circulation and reserves held by commercial banks at the central bank. Citizens can access this monetary base directly only through physical cash. All other electronic payments happen by transferring deposits between commercial banks, settled through the central bank.
The digital euro would change part of this picture. It would allow individuals and businesses to hold and transfer, in digital form, a direct liability of the ECB — bringing electronic payments closer in legal nature to physical cash. It would not replace bank deposits, but it would add a new form of public digital money.
The stated goals: kill the Visa–Mastercard duopoly, stop dollar stablecoins
The positions adopted by the ECON committee include several key principles: free wallet opening; a personal cap on digital euro holdings; privacy protections; a guarantee that physical coins and banknotes will not be phased out; and an exemption from mandatory acceptance for micro-enterprises — unless they already accept other digital payment methods.
That last point is worth a note for EU observers: in Italy, businesses are already legally required to accept electronic payments under PNRR (National Recovery Plan) rules, with fines for non-compliance. Once the digital euro is rolled out, that mandatory acceptance would almost certainly extend to it.
Among the stated ambitions for the project: reducing transaction costs in digital payments, and — this is where geopolitics enters — dismantling the near-monopoly held by Mastercard and Visa, while also checking the expansion of dollar-backed stablecoins. Tether, the largest stablecoin by market capitalization (founded, incidentally, by two Italians), effectively functions as a digital dollar. Some analysts have already coined the phrase «crypto-mercantilism of the dollar» to describe the phenomenon the ECB is trying to counter.
The fear: a future where your money has an expiration date
Despite reassurances from the ECB and the European Parliament, the digital euro project continues to raise serious concerns — above all about privacy and the potential for state control over citizens’ finances.
The logic is straightforward. Unlike bank deposits, which represent a claim against a commercial bank, the digital euro would be a direct liability of the European Central Bank. Citizens could hold a form of public digital money issued by the ECB itself.
The ECON regulation attempts to address these concerns with privacy guarantees. But critics argue the deeper issue is not today’s rules — it’s what the technology would make possible in the future.
According to skeptics, a central bank digital currency could, at least in theory, make it technically feasible to introduce — through future legislation — instruments that are currently unthinkable for physical cash: money with an expiration date to nudge spending; restrictions on purchasing certain goods or services; geographic limits on where funds can be used; or, in the most extreme cases, the freezing of a citizen’s digital wallet.
These scenarios echo, on one side, China’s social credit system. On the other, they recall what actually happened during the Covid pandemic: when Canadian truckers staged a protest against public health mandates, the government froze not only their bank accounts but also 120 digital and personal crypto wallets that had received donations in support of the movement.
With a digital euro, making that kind of intervention — or shutting down an individual’s economic life entirely — would be far simpler, technically speaking.
For now, there is nothing left to do but wait and see what the final regulation actually says.
Editor’s note
This article was originally published in Italian on money.it by Raphael Raduzzi on July 01, 2026 as «Euro digitale in arrivo dal 2029. Addio privacy, la BCE potrà congelarti il portafoglio come in Canada». It has been translated and adapted for an international audience by the Money.it International desk.
