EU Parliament Votes to Back Digital Euro

The move was welcomed by the European Central Bank, which has been pushing for the creation of a central bank digital currency for three years.

This photograph shows the hemicycle of the European Parliament during a plenary session in Strasbourg, eastern France, on July 8, 2025. JEAN-CHRISTOPHE VERHAEGEN/AFP via Getty Images

The European Parliament formally backed the creation of a digital euro in a vote on July 9.

Lawmakers voted 416 in favor, 169 against, and 22 abstentions on the motion, which states that the parliament will negotiate for the digital euro to be issued by the European Central Bank (ECB) in upcoming talks with the president of the European Council, currently held by Ireland.

Along with backing the creation of the central bank digital currency (CBDC), the parliament’s negotiating team will push for it to provide a secure, private, and free-to-use means of payment, both online and offline.

It will also require most businesses to accept it, and for a cap to be placed on how many digital euros any individual can hold, as well as for basic services, such as opening an account, holding and managing funds, and access to at least one payment instrument, would be free of charge.

The parliament will also push for banks and payment service providers from non-euro EU countries to be allowed to distribute the digital euro, while ensuring that eurozone countries are obliged to keep cash accessible.

Under these terms, businesses would not be allowed to ban cash, and member states would have to regularly monitor cash availability, with special attention to vulnerable groups.

ECB President Christine Lagarde welcomed the parliament’s backing in a July 9 post on X.

In an accompanying video message, Lagarde described what would happen next in the process, saying “the European Parliament, the Council, and the [European] Commission are going to work together to come out with a final version that will apply across the board.”

“Once this happens, the trilogue, as it’s called, is over and satisfactory. Then we at the European Central Bank will get started with rolling out all of our technical work, all testing and piloting, so that as soon as possible—as long as everything is technically solid, valid, and safe—we’ll be able to launch the digital euro as well,” Lagarde said, adding that physical currency would complement the CBDC.

The move comes just over two weeks after the Parliament’s economic committee approved a draft regulation for the digital euro, saying the CBDC would “reduce overreliance on non-European providers by becoming a pan-European means of payment and would bring the single currency into the digital era by giving Union citizens the freedom to opt to pay with central bank money in their daily transactions.”

The proposed digital currency will essentially function as an electronic wallet guaranteed by the ECB but marketed by banks or fintech companies, and will be usable by all eurozone residents to make payments online and in person.

That wallet will be subject to an as-yet-undecided holding limit.

At the committee stage, Siegbert Frank Droese of the conservative Europe of Sovereign Nations political group in the European Parliament said his faction had voted against the proposal; however, it passed by a vote of 43–14, with 1 abstention.

The progress toward the launch of the digital euro comes after three years of back-and-forth between the ECB and banks, which have been concerned about deposit outflows and potential revenue losses.

A 2025 PwC study commissioned by the European Banking Federation, the European Association of Co-operative Banks, and the European Savings and Retail Banks Group estimated implementation costs for banks in the range of tens of billions of euros across the sector in the early years.

Specific concerns included adapting IT systems for funding and defunding, waterfall mechanisms to enforce holding limits, billing and fee systems, and branches/ATMs.

Banks also highlighted risks to liquidity management, lending capacity, and overall financial stability.

In an effort to assuage these concerns, the European Parliament laid out safeguards in the draft regulation, including that the European Commission would decide how many digital euros each user could own, based on an ECB recommendation, and review that ceiling at least every two years.

Businesses would not be allowed to hold digital euros for longer than 24 hours. The digital euro would neither earn interest nor cost its users anything.

ECB simulations published in 2025 showed that depositors could withdraw up to 699 billion euros ($796 billion) from euro zone banks if a limit on digital euro holdings was set at 3,000 euros each, equalling 8.2 percent of all retail sight deposits.

It did, however, show that the impact on small market lenders and retail banks would be greater than on larger institutions.

Other nations, such as Canada and Australia, are planning to introduce CBDCs or have already done so, like the Chinese Communist Party in China.

The yuan version of the CBDC strengthens the CCP’s “Social Credit System,” James Gorrie said in a column for The Epoch Times in April.

“A retail CBDC allows the state to freeze assets instantly if a citizen’s behavior deviates from Party orthodoxy,” he said.

US Opposition to CBDCs

The United States, however, under the Trump administration, is moving in a markedly different direction.

Calling it “a dangerous threat to freedom,” President Donald Trump said during his 2024 campaign that he would not allow it in the United States and vowed to take legislative action to prevent it.

“I also remain fully committed to my pledge, never to allow the creation of a central bank digital currency in America,” Trump said in July 2025.

“My first week in office, I signed an executive order to ban the creation of a CBDC in the United States. And very soon, I look forward to signing legislation that will codify and make it a permanent law.”

Since then, numerous pieces of legislation have been introduced, with the most recent being the 4-year CBDC ban in the bipartisan housing bill, which passed the Senate on June 22.

That bill, however, hit a stumbling block on June 24, when Trump refused to sign it, saying that Congress should first pass the SAVE America Act, an election integrity bill requiring photo ID and proof of citizenship.