European Parliament adopts negotiating position on the digital euro regulation

What happened

The European Parliament adopted its position on the digital euro regulation on 9 July 2026. The Economic and Monetary Affairs Committee had approved the text in June 2026, after Parliament resolved a procedural blockage in March 2026 that had held the file up. The file now moves to trilogue, the negotiation between Parliament, the Council of the European Union and the Commission that produces the final text. Banca d'Italia said negotiations were expected to start by the end of July 2026 and that the legislative process was targeted for completion by the end of 2026. In parallel, the Eurosystem is continuing technical design and experimentation work on the digital euro, which cannot be issued until the regulation is in force.

Why it matters

The digital euro is the euro area's answer to the growth of dollar stablecoins in European payments, and the design parameters under negotiation (holding limits, remuneration, distribution through banks and compensation for intermediaries) determine how much deposit substitution it would cause. Those same parameters are being debated in the MiCA review, so the two files are effectively one policy question about who issues euro-denominated digital money. For banks the immediate stake is deposit funding: a generous holding limit shifts retail balances off bank balance sheets, while a tight one limits the digital euro to a payment instrument rather than a store of value.

What is not settled

Holding limits, remuneration and intermediary compensation are not settled; the final text depends on trilogue outcomes that had not begun as of 25 July 2026.