EU Lawmakers Advance Digital Euro Bill With Privacy Rules
A European Parliament committee has approved legislation for a digital euro, establishing privacy protections, holding caps, and a no-interest design.
A key European Parliament committee has moved forward with legislation that would establish a legal framework for a digital euro, marking a significant step toward the European Union's potential adoption of a central bank digital currency. The vote signals growing political momentum behind the project, even as questions about its ultimate form and timeline remain open.
The proposed rules would govern both an offline and an online version of the digital euro, reflecting an effort to ensure broad accessibility — including for citizens in areas with limited internet connectivity. That dual-mode design is notable because it attempts to replicate some of the anonymity properties of physical cash in a digital context, addressing one of the most politically sensitive dimensions of any government-backed digital currency.
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Privacy protections are central to the bill's architecture. Lawmakers have insisted on safeguards that would limit the degree to which transactions could be monitored, a concession to public and civil-society concerns about surveillance risk. Alongside those protections, the legislation also proposes holding limits — caps on how much digital euro any individual could hold — designed to prevent large-scale shifts of deposits away from commercial banks, which could destabilize the broader financial system.
The decision to bar interest payments on digital euro holdings is equally deliberate. By making the digital euro non-yielding, policymakers aim to position it as a payments instrument rather than a savings vehicle, further reducing the threat of bank disintermediation. Together, these design choices reveal a careful balancing act: advancing financial modernization while protecting the institutional structures that underpin the eurozone economy.
The committee vote is a procedural milestone rather than a final green light — full parliamentary approval and coordination with the European Central Bank's own technical development track would still be required before any launch. Continue reading at Cointelegraph.
