The digital euro is intended to become the currency of the digital era while complementing, rather than replacing, cash. It would be public money issued and backed by the European Central Bank, accepted throughout the Eurozone, available online, free at a basic level and subject to privacy safeguards alongside anti-money-laundering controls.

European institutions are broadly aligned on the project, although negotiations between the Commission, Parliament and Council remain pending. The so-called trilogue is expected to take place by the end of the year, while the regulation that would enable the ECB to establish the system is expected to make way for a launch in 2028.

One of the main disputes concerns the maximum balance allowed in digital-euro wallets. The limit is expected to be around €3,000, although banks are pushing for a lower figure because of concerns that deposits could move out of traditional accounts. Consumer groups, by contrast, are seeking a higher ceiling.

Another unresolved issue is the cost of using the digital euro at shops. José Manuel González-Páramo, a former executive board member of the ECB and an expert on the subject, said at a discussion organised by the European Movement and Valencia’s Economic and Social Council that the system should initially be cheaper than existing payment methods, such as credit cards.

The remaining question is how the fee ceiling will be set and how the proceeds will be distributed. The debate involves substantial sums, given the volume of payment transactions. Consumers and retailers want lower charges, while the financial sector is pressing to keep them closer to current levels.

These negotiations follow a broader political shift in favour of a public digital currency backed by the central bank. The European Parliament joined the Commission, Council and ECB on 23 June in supporting that model, after rapporteur Fernando Navarrete revised an earlier report that had favoured private-sector solutions.

The banking industry has warned about possible disintermediation, deposit outflows and competition from a public digital currency. Those concerns are significant for a sector holding €941.609 billion in non-interest-bearing current accounts in Spain and more than €8 trillion across the eurozone.

Sources: El País Economía.