The EU’s initiative for a digital cash equivalent cannot move forward unless the European Parliament reaches a consensus.
Members of the European Parliament are facing difficulties in agreeing on a compromise regarding the digital euro’s design, casting doubt on the legislative process, according to three insiders and documents reviewed by Euronews.
During a Tuesday meeting, rapporteurs highlighted deep disagreements about the fundamental nature of the digital euro, making progression problematic, based on an email exchange obtained by Euronews.
“We agreed to disagree,” a source close to the discussions told Euronews, summarizing the core of the debate.
Per Tuesday’s agenda, Fernando Navarrete of the European People’s Party (EPP), who leads the dossier in the European Parliament, presented a new concept for the digital euro, referring to it as “e-cash.”
This concept would limit use to offline transactions only, functioning as a “tokenised digital form” of currency without providing users retail accounts on the European Central Bank (ECB) ledger.
Euronews contacted Navarrete’s office for comment but did not receive a response before publishing.
Conversely, the Socialists and Democrats (S&D) and Renew Europe endorse the European Commission’s proposal, where users have retail accounts on the ECB ledger and can conduct transactions online and offline with the digital euro.
“Europe must control and own its key infrastructure. Amid unprecedented geopolitical shifts and the breakdown of rule-based international systems, payment sovereignty needs to be rooted in shared infrastructure,” S&D shadow rapporteur Nikos Papandreou told Euronews.
The European Parliament remains the sole institution yet to finalize its stance, while EU member states agreed on their position last December.
A vote on the matter is anticipated in May at the European Parliament’s plenary session; however, existing divisions among lawmakers may jeopardize its approval.
If the plenary approves the digital euro, the European Commission, Parliament, and Council would then begin political negotiations.
Nonetheless, such talks cannot commence until the Parliament establishes a clear position.