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The European Parliament’s Civil Liberties Committee (LIBE) has called for stronger guardrails for privacy and guaranteed access to physical cash in its opinion on the EU's proposed legislation to establish a digital euro.
In a series of amendments adopted by LIBE rapporteur Emil Radev, the lawmakers have stressed that any digital version of the euro must complement, not replace, physical cash, reaffirming the right of citizens and businesses to choose between payment methods.
“To underline the necessity to maintain the possibility of using cash in society, the digital euro, both in the case of online and offline transactions, should always complement physical cash and not replace it,” the report says.
“Citizens and businesses should always have the right to use one or another form of the legal tender or a combination of them.”
The digital euro, proposed by the European Commission in June 2023, aims to introduce a central bank digital currency (CBDC) for use across the euro area.
Key amendments
LIBE’s opinion was submitted to the Parliament’s Economic and Monetary Affairs Committee (ECON), which leads the legislative file.
The committee, led on this file by Bulgarian MEP Radev, also proposed enhanced provisions on user education and fundamental rights.
One amendment would require member states and payment service providers (PSPs) to inform citizens about the digital euro’s privacy features and how it safeguards their rights.
According to the amendment, this should include “the benefits of its use as well as its characteristics relating to the protection and exercise of fundamental rights and freedoms”.
“Member States whose currency is not the euro may also provide such information and educational measures to their citizens, in cooperation with the European Central Bank where relevant. These information and educational measures should be available free of charge,” the amendment suggests.
On access, the committee urged inclusion of vulnerable groups such as asylum seekers and individuals without fixed addresses.
It also recommended that the European Central Bank (ECB) and EU supervisory authorities issue joint guidance on how anti-money laundering (AML) rules apply to these populations, while cautioning against unnecessary collection of sensitive data.
Another key amendment addresses privacy concerns specific to offline digital euro transactions.
LIBE proposed that online and offline holdings should be capped separately to prevent indirect disclosure of user balances.
Combining the limits, the committee warned, would risk exposing how much offline currency a user holds, undermining its privacy and cash-like nature.
An ongoing process
Although the ECB has stressed that privacy is an important design feature of the digital euro, civil society organisations and some lawmakers have expressed fears that the new currency could erode financial anonymity if not properly regulated.
The LIBE committee’s opinion will feed into ECON’s report, which is expected to form the basis of the parliament’s negotiating position with the Council of the EU once both have voted and reached consensus on the EU’s potential CBDC.
The digital euro legislation remains under review, with formal trilogue negotiations unlikely before 2026.
However, the ECB has released its third progress report on the initiative.
In it, the central bank emphasised its “continuous engagement with stakeholders”, stating that it has intensified outreach to market participants, merchants and consumers through technical sessions, workshops and bilateral meetings.
Another issue it raised was more pertinent, considering recent service problems in Spain and Portugal, with the central bank stating that it has “continued to carry out technical analysis to ensure the digital euro remains operational during emergencies such as power or network outages”.
Another issue it raised, particularly relevant in light of recent service disruptions in Spain and Portugal, was the need to ensure the digital euro remains operational during emergencies such as power or network outages.
The central bank said it has “continued to carry out technical analysis” in this area.
