Milan: The project to give the euro a digital form has passed a threshold that years of pilots and position papers could not. On 11 July the European Commission published the final regulatory framework for a digital euro, and the European Central Bank followed with a new draft of its rulebook, moving the currency from concept toward legislation.

A digital euro would be central bank money for everyday payments, a public alternative to the private cards and apps that now dominate the checkout. The ECB casts it as a matter of monetary sovereignty: without a European option, retail payments risk depending on networks based outside the bloc, a vulnerability policymakers have grown reluctant to accept.

The legislative machinery has been grinding forward for months. The European Parliament backed the idea in February, calling it essential to reduce fragmentation in retail payments and to strengthen the single market. In June the relevant parliamentary committee adopted its position on the single-currency package, approving the file that establishes the digital euro by 43 votes to 14 with one abstention.

The ECB has moved past abstract design toward the mechanics of a payment system. Its latest rulebook, a working draft, folds in feedback from banks and merchants on how the currency would settle, how offline payments might work, and how holdings could be capped to avoid draining deposits from commercial banks. Those holding limits remain among the most contested details.

Banks worry that a widely used digital euro could pull money out of the accounts they rely on to lend, a fear the ECB answers with caps and with a design that routes distribution through existing intermediaries rather than around them. Privacy campaigners press a different concern, insisting that a public digital currency must not become a tool for tracking how citizens spend.

Timing tempers the drama. The ECB aims to be ready for a possible first issuance during 2029, and only if EU legislators pass the necessary laws over the course of 2026. Nothing about the July milestone guarantees that a shopper will tap a digital euro any time soon; it guarantees only that the legal text now exists to argue over.

What has changed is the centre of gravity. For years the digital euro lived inside the ECB’s preparation phase, a study rather than a statute. With a Commission framework on the table and a parliamentary committee behind it, the question shifts from whether Europe will draft the rules to whether its lawmakers will adopt them, and on whose terms.