MNI: Digital Euro On Track For Approval By End Of The Year

The European Union’s incoming Irish presidency aims to schedule trilogue talks on the digital euro for as soon as July 16, which could see its first phase approved by the end of the year after a final decision on how much of the currency can be held in a digital wallet, sources close to the matter told MNI.

A quick start to the talks between the parliament, European Commission and European Council should allow the digital euro to be approved by the 25th anniversary of the launch of the common currency in January 2027, as targeted by European Central Bank executive board member Piero Cipollone.

The most difficult discussions will focus on the maximum amount of the currency that can be held. The European Central Bank’s initial proposal last year is for a EUR3,000 limit, in order to limit the drain of funds from the banking system, but critics including former Bank of Spain Governor Miguel Angel Fernandez Ordonez have said that this is too low. (See MNI INTERVIEW: Digital Euro Risks Failure-Ex Bank Of Spain Gov)

The digital euro is key to the ECB’s plans to keep central bank money at the heart of the financial framework, even as alternatives appear such as stablecoins.

The European Parliament’s ECON committee is now due to hold a double vote on amendments to the digital euro legislation and on entering the Trilogue negotiations, with a vote on mandate following a plenary session on July 6, sources said. Starting the Trilogues before the summer break should allow a second round of talks in the autumn before approval, the sources said.