The EU’s Digital Euro Is Just a Whisker Away from Becoming a Legal Reality

Brief note to readers: apologies for posting a second article on the subject of central bank digital currencies in less than 24 hours, which is the result of lack of coordination between Curro and myself. That said, as NC reader Tom Dority notes in the comments thread to Curro’s excellent summary, this is one of the most consequential developments of this still young century — not that you would know that if you depended on legacy media for your daily diet of news and opinion. Any readers who are still unfamiliar with this topic should read Curro’s piece first.   

The European Parliament wants a central bank digital currency. And it wants it as soon as possible, and in all its possible forms.

This was the big takeaway from the parliament’s plenary session on Wednesday in which it approved the inclusion of two amendments to the annual report on the activities of the European Central Bank (ECB). Those amendments, while not legally binding, represent a huge fillip for the architects of the Euro Area’s proposed central bank digital currency (CBDC).

MEPs consider the proposed digital euro “essential” in the current context of heightened geopolitical uncertainty and over-reliance on payment infrastructure from the United States, which is a much less reliable partner today. Per the first of the two amendments, the digital euro is considered key to bolstering the EU’s monetary sovereignty, reducing the fragmentation of retail payments and supporting the integrity and resilience of the single market.

The most surprising thing to come out of Wednesday’s session was the scale of support for the digital euro project. The text of the first amendment was approved by a massive margin of 438 votes in favour compared to 158 against and 44 abstentions.

The second amendment was arguably even more important for the future prospects of the proposed CBDC. The text emphasised that the “digital euro, both online and offline, must contribute to safeguarding universal access to payments and achieving broad acceptance by merchants throughout the Union”. In other words, it must be as universally accepted as cash.

MEPs even added a paragraph of their own to bolster the future use case for the digital euro:

“If the increasing digitalisation of payments is left exclusively in the hands of private agents and third countries, there is a risk of creating new forms of exclusion for both users and merchants.”

This clause, as I will explain later, is darkly ironic given the unparalleled exclusionary potential of programmable CBDCs. Needless to say, the second amendment was adopted with 420 votes in favour, 158 against and 64 abstentions.

While both amendments have no legislative impact, they send a clear message: when the European Central Bank and the European Commission present their final legislative framework for the digital euro, it will have no trouble getting approved.

The Final Hurdle

The reason this is important is that the European Parliament is the last regulatory hurdle facing the digital euro. The 20 finance ministers of the Eurozone member states have all backed the ECB’s digital euro plans, and like the overwhelming majority of MEPs, they want it as soon as possible, and in both of its possible forms (online and offline).

This did not seem like such a foregone conclusion just a few months ago. The European Parliament’s own rapporteur on the digital euro, Fernando Navarrete, a conservative politician from Spain appointed by the European Parliament to lead the parliament’s legislative push for a digital euro, had argued for a significantly scaled-down version of the project.

In his draft opinion, Navarrete had argued that the ECB and Commission should initially focus on launching a digital euro for money transactions between banks and large institutions (known in the trade as a wholesale CBDC) while the Euro Area’s commercial banks continue working on developing a bloc-wide instant payments system.

The ECB, he said, could also launch an offline digital euro for the general public. This would come in the form of a credit stored on a special device, presumably in card form or on a smartphone, that would allow members of the public to pay at the point of sale without an internet connection.

Navarrete argued that such a system should not depend on a central processing authority, therefore allowing for digital anonymous payments. Another potential advantage of an offline digital euro is that it would strengthen the resilience of the payment system in the event of power outages and payment system failures. Just like cash, the offline digital euro could continue to be used in such situations.

The draft opinion also suggested watering down the proposed obligation to accept digital euros in all retail settings. Meanwhile, as the FT reported in November, the digital euro CBDC was also facing pushback from the Euro Area’s banks, which claimed that the “current design of the retail digital euro largely addresses the same use cases as private solutions, without offering any clear added value for consumers.”

It’s also worth keeping in mind that Navarrete’s predecessor as rapporteur on the digital euro, the German MEP Stefan Berger, ended up becoming one of the digital euro’s fiercest critics, eventually stepping down from the role. Among other things, Berger voiced concerns about the existential threat the CBDC could pose to small German savings banks, which are the financial backbone of Germany’s already struggling Mittelstand (small and medium sized businesses).

From Politico:

According to Berger, what banks fear most is that the digital euro could prompt customers to withdraw deposits very suddenly, sparking a destabilizing bank run on smaller lenders. “It’s no longer the money of the bank [after it is transferred],” Berger said, adding that the average deposit for a small German bank is about €3,000.

Coincidentally, €3,000 is the proposed holding limit for the digital euro.

Berger, like Navarrete, became convinced that central bank control over digital infrastructure should be limited, arguing instead for the introduction of a so-called wholesale model governing transactions between the central bank and the banking industry. He thought that could be a way to calm everyone’s fears.

“This was my idea, just reverse it, but the ECB … they don’t want [to], and the Commission said: ‘No, just make progress with this file,’” he said.

Berger began facing accusations from MEPs in the S&D (socialists), Renew Europe (liberals) and Greens blocs, most of whom support the introduction of the digital euro, that he was undermining the “democratic process.” Eventually, he handed in his notice.

Grand Deceptions

In sum, just a few months ago it looked like the digital euro was facing a wall of resistance, not only from private sector banks but also from the two MEPs that had been appointed to promote the project. But that wall, it seems, has now crumbled. An overwhelming majority of the EU’s rubber-stamping legislative chamber not only support the launch of a digital euro in all its forms, they want it to happen as soon as possible.

“Parliament has sent a very clear message: we want to move quickly towards a full digital euro,” said Socialist MEP Jonás Fernández. “There is no room for further manoeuvres that delay the process. We urge the rapporteur to take note of the position of the chamber and abandon a strategy that divides the project.”

One of the grand deceptions about the proposed digital euro is the oft-touted claim that it will help to bolster the EU’s monetary sovereignty while reducing its dependence on US providers.

The digital euro protects our independence.

US Big Tech already controls how Europe pays.
Visa. Mastercard. Silicon Valley.
Now private stablecoins want even more power over European transactions.

The digital euro breaks that dependency:
– European privacy rules
– No platform… pic.twitter.com/Ty0rE7rPBO

— Verso Europa 🇪🇺 (@VersoEuropa) February 11, 2026

What is often not mentioned is that US payment card companies, banks and many Silicon Valley companies have been closely involved in the development of many central bank digital currencies, including the digital euro. More specifically, as the German financial journalist Norbert Häring reported in late 2023, the European Central Bank has sought to outsource its data to US cloud providers (machine translated):

As Handelsblatt reported on June 6, there was clear criticism of the ECB’s intention to move some of its IT applications to the cloud and also to rely on services from large American service providers such as Amazon Web Services (AWS), Microsoft and Google at the Handelsblatt conference “Future IT”.

Claudia Plattner, then ECB Director General for Information Technology, said at the conference that American companies could not be dispensed with because the most powerful cloud providers came from the USA.

Cloud services is a euphemism for a business model in which data and programs are not stored on their own servers, but on the servers of other companies.

As Handelsblatt writes, European data protection authorities and many politicians are critical of the use of American cloud service providers. Due to the CLOUD Act, US authorities have access to data stored on servers of US companies, including those abroad.

In other words, all the financial data that will soon be amassed on Euro Area citizens and residents by the European Central Bank through its control of the upcoming digital euro may be accessible not only to Silicon Valley companies like Amazon but also US government agencies. To try to quell those fears, Amazon recently launched the AWS European Sovereign Cloud.

It also means that if the services provided by companies like AWS go down, the digital euro, at least in its online format, will also go down, as happened just a few days ago to Brazil’s Pix instant payments system during an AWS outage (h/t DGE).

The president of the German Savings Banks and Giro Association (DSGV), Ulrich Reuter, has also warned that the digital euro, as currently conceived, will offer non-European providers easy access to European customers, their data, and payment infrastructure. From Heise (machine translated):

For payment processing, for example via apps, wallets, and point-of-sale solutions, the involvement of intermediaries is necessary. By creating a new, standardized digital currency infrastructure, it could become easier for large, technologically agile big tech or US payment corporations to link their services directly to this system.

If these large global players offer more user-friendly and innovative wallets or apps than European banks, they are likely to quickly occupy the interface to the customer. While they would not issue the money themselves, they would gain control over the customer experience and transaction data.

Another grand deception being peddled about a digital euro is that it will help to reduce financial exclusion in the Euro Area, as the MEPs asserted in the paragraph added to the second of the two amendments. As we argued in our March 25, 2025 post, “Five Reasons Why Euro Area Citizens Should Be Terrified By the ECB’s (Apparently) Fast Approaching Digital Euro“, programmable CBDCs could become a perfect weapon for financial exclusion, especially if cash use is gradually phased out following the digital euro’s introduction:

It is not just the prospect of the ECB and the Commission being able to track, trace and monitor all of our financial activity — what we earn, how we spend, what we save — that should terrify us; it is also the prospect of them being able to “program” money so as to achieve certain monetary, fiscal or social policy objectives.

In a fully cashless digital-euro system, the central bank and Commission would have a complete record of every transaction made by everyone, allowing it to essentially eradicate tax evasion. The potential applications go far beyond that, notes NS Lyons, a Washington DC-based consultant and analyst in his 2022 article CBDC Caution: A Central-Bank-Issued Digital Dollar Could Enable a Dark Future:

Fines, such as for speeding or jaywalking, could be levied in real time, if CBDC accounts were connected to a network of “smart city” surveillance. Nor would there be any need to mail out stimulus checks, tax refunds, or other benefits, such as universal basic income payments. Such money could just be deposited directly into accounts. But a CBDC would allow government to operate at much higher resolution than that if it wished. Targeted microfinance grants, added straight to the accounts of those people and businesses considered especially deserving, would be a relatively simple proposition.

Other potential forms of programming applications include setting expiry dates for stimulus funds or welfare payments to encourage users to spend it quickly in order to boost economic activity. It would be a central banker’s wet dream. Programmable money could also be used to encourage the right sorts of consumption and discourage or even prevent the wrong sorts. Taken to the extreme, governments could use CBDCs to exclude the deplorables and undesirables from the economy altogether.

As independent media outlets like this one have shone an ever brighter spotlight on the potential dangers of programmable money, the ECB has shifted its stance, claiming now that it will not use programmable money. But at the same time it has relabelled programmable money as “conditional payments” and appears to have given the job of programming these payments to the payment service providers who will be managing all customer-facing activities.

As Lyons warns, CBDCs, “if not deliberately and carefully constrained in advance by law,… have the potential to become even more than a technocratic central planner’s dream. They could represent the single greatest expansion of totalitarian power in history.”

“A Political Sledgehammer”

Now, imagine that power in the hands of senior eurocrats like Ursula von der Leyen, Kaja Kallas and Christine Lagarde. Even without a programmable CBDC, the EU is already ratcheting its sanctions against the bloc’s citizens and residents. As Pascal Lottaz explains in a recent substack, it is their extra-legal nature that give these sanctions such force:

It [came] as a shock to many of us in the alternative media sphere when, on December 15, the EU put the esteemed analyst, political commentator, and former Swiss Army colonel Jacques Baud, on its Russia-Sanctions list. He was one of several newly sanctioned individuals (alongside, for instance, the popular French journalist, Xavier Moreau). Baud is already the second Swiss to be sanctioned. In June 2025, the EU announced that Nathalie Yamb, a Swiss-Cameroonian activist against neocolonialism, would be sanctioned.

Being on the EU sanctions list is a devastating event for the people concerned, especially if they reside in an EU country or a closely associated state like Switzerland, Norway, or the UK. It means banks will freeze their accounts, credit companies will cancel their cards, they are not allowed to enter into contracts with EU-affiliated companies or private persons, and no business in the EU is allowed to have dealings with them, which, in theory, even precludes them from buying bread and other necessities of life. Furthermore, many international businesses will cancel all their services to them, including mail providers, social media platforms, etc. Even Swiss banks freeze or cancel accounts, out of fear they might get in trouble if they don’t comply with EU regulations. I recently interviewed two sanctioned people, Nathalie Yamb and Hüsseyin Dogru, and their testimonies are heartbreaking…

As of early January 2026, there were 59 private individuals on the EU’s Russia sanctions list. Originally, this tool was levied only against Russian businessmen and people living in Russia (which was already problematic in my view), but since 2024, the EU has begun using sanctions as a political sledgehammer to crack down on various forms of dissent. Yamb, for instance, was sanctioned mostly for her activism against France’s neocolonial behavior in Africa, and Dogru for being a vocal German journalist for the Palestinian cause. The little text snippets that serve as justifications for the decision to include them in the sanctions list even mention those non-Russia-related activities for their listing.

Naturally, one would assume that in a free and liberal society, based on the rule of law, sanctions against citizens and residents must be illegal. Right? In fact, the EU parliamentarian Michael von der Schulenburg has commissioned a report that is very clear in its verdict. Sanctions, it holds, break existing EU law on individual freedoms.

However, the problem we have is that while sanctions are doubtlessly a breach of some EU law, there is other EU law that allows the Council to take these measures. Procedurally, the EU is not in breach of its competences because sanctions are not a domestic policing matter but a foreign policy decision.

Modern forms of dystopia often bring to mind the prescient warnings of Orwell’s 1984, Huxley’s A Brave New World and Dick’s Minority Report. But what the EU (and the US) are doing in their financial sanctions against individual citizens and residents is strongly reminiscent of Kafka’s The Trial and other works. Once you get caught in the bureaucratic vice, it just keeps tightening:

My bank, Comdirect, is not only blocking my transfers — they are literally deleting my transfer orders without any notice or explanation.

Today at 10:53 AM, I submitted a transfer order.

This happened now few times in the last one week. https://t.co/hVuxAhNe1h pic.twitter.com/UJqJDRwpTb

— Hüseyin Dogru (@hussedogru) February 12, 2026

Germany’s federal government has gone a step further by turning what were previously considered administrative offences into criminal offences, reports Berliner Zeitung (machine translation):

However, there are no constitutional elements such as a hearing, defence, judgment and appeal. There is no separation between the prosecution and the court, and access to files and discovery cannot be requested. As a result, the trial amounts to a reversal of the presumption of innocence: the punished person must prove that he has not violated political guidelines or laws.

The reform implements an EU directive that obliges all member states to enforce sanctions uniformly. The basis of the decision is the Bundestag printed matter of mid-January, which contains the report and recommendation of the responsible committee. Astonishingly, with the exception of the AfD, none of the parties represented in the Bundestag has a problem with the new policy.

New German law makes de facto illegal to support my family even though they are not sanctioned

Germany turned EU sanctions violations from administrative fines into criminal offenses — without basic safeguards like hearings, independent courts, or full appeals. In practice, the… https://t.co/vsWAbDk4zD

— Hüseyin Dogru (@hussedogru) February 12, 2026

This is what the EU and its constituent members are doing before the digital euro becomes a legal (and financial) reality — imagine what it will be like afterwards, when many of these processes are automated. That could be in just a year or two’s time — the ECB has set a launch date for 2029, but given the mad rush they are in to get it up and ready, it could come sooner.