The European Parliament’s Economic and Monetary Affairs committee approved a negotiating mandate on Tuesday that unlocks the legal framework for a digital euro, a central-bank digital currency intended to offer a publicly controlled alternative to dominant US payment networks. The move comes as European policymakers, particularly in the wake of the Trump administration, have grown wary of dependence on Visa, Mastercard, and PayPal, which together handle 61 percent of card payments in the eurozone and nearly all cross-border transactions. The digital euro would carry the same value as physical currency and be usable via card, banking app, or mobile device, with basic services free for citizens.

The design reflects a compromise aimed at preventing capital flight from commercial banks. The European Central Bank would not open accounts directly for individuals; instead, banks would act as intermediaries, integrating the digital euro into existing home-banking applications. A politically sensitive holding limit per wallet—still to be negotiated between Parliament and member states—would cap individual balances, with proposals ranging from a few hundred to 3,000 euros. The ECB has long favoured a low ceiling to keep commercial banks on board, while banks themselves, which estimate the project’s cost at €20.5 billion against the ECB’s figure of under €6 billion, argue the instrument is unnecessary and risks draining deposits. Privacy provisions exclude full anonymity but promise a high level of confidentiality, with the ECB stating it will not identify users by their payments.

Viewed from Brussels, the digital euro is one pillar of a broader effort to strengthen Europe’s digital sovereignty. The same week, the European Commission proposed measures to equip Europol with a sovereign cloud infrastructure and a shared data space for cross-border investigations, alongside a proposed doubling of the agency’s budget to €3 billion for 2028–2034. The reforms respond to warnings that criminal groups are exploiting artificial intelligence to target victims, and they introduce a new European remote participation warrant to allow suspects and victims to attend hearings in other member states via video link. The push for digital autonomy is not confined to Europe: in Mexico, the central bank has created a new “Level 2 Bis” account for small businesses, capping monthly cash deposits at roughly 26,000 pesos while requiring at least 12,000 UDIS in digital payments, a measure designed to accelerate the shift away from cash and bring more businesses into the formal financial system. Simultaneously, the Mexican tax authority warned that frequent cash deposits above 15,000 pesos per month will trigger reporting obligations, reinforcing the trend toward traceable digital transactions.

Separately, the European Central Bank’s latest convergence report found that the five EU countries still outside the eurozone—Sweden, Poland, Hungary, Romania, and the Czech Republic—have made only “limited progress” toward meeting the criteria for adopting the single currency. Romania, the most willing candidate, does not expect to join before 2029 and misses key benchmarks on inflation and deficits. Hungary’s new government has set a 2030 target, while Sweden and the Czech Republic deliberately avoid the exchange-rate mechanism that would start the process. The digital euro regulation is expected to receive plenary approval in early July, followed by endorsement from EU finance ministers before year-end, with an operational launch not anticipated before 2029.