The Council of the European Union has agreed to the introduction of the digital euro.
The EU Council has given its agreement on the introduction of the digital currency. The Council has approved its negotiating position on two dossiers: a legal framework for a possible digital euro and a regulation clarifying the status of cash as legal tender. With this mandate, the Council can start talks with the European Parliament.
After the legislation is approved, the European Central Bank (ECB) will ultimately decide whether the digital euro will be introduced. The ECB previously indicated that a digital euro could be operational in 2029.
Digital euro
The digital euro is intended as a public means of payment alongside cash, for citizens and businesses throughout the euro area. The proposal envisages both online and offline use, enabling payments without an internet connection. The texts also provide for privacy measures for payments and transfers. At the same time, the system should continue to exist alongside cards and apps from private providers.
Limits, free basic services and access
To prevent users from using the digital euro primarily as a savings instrument, the Council wants to set limits on the amount someone can hold in a wallet or online account. The European Central Bank would determine the specific limits, within a general ceiling. The Council wants to review that ceiling at least every two years.
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The Council also stipulates that payment service providers may not charge fees for a range of basic services. These include opening and closing accounts, executing payments and converting between bank deposits and digital euros at the same provider. Additional services may be subject to a fee.
Furthermore, the mandate describes a framework for fair access to hardware and software on mobile devices. This should give providers of digital euro services access to necessary functions on smartphones.
Cash
For cash, the Council wants to protect its acceptance as a payment method, with limited exceptions. These include remote purchases and unmanned points of sale. Shops may still express a preference for digital payments.
Member states must monitor the acceptance and access to cash with indicators. They must intervene if problems arise. The Council also requests plans to keep cash available in the event of major disruptions to electronic payments.