EU Finance Ministers Near Agreement on Digital Euro with Holding Caps

European Union finance ministers are actively working towards establishing a digital euro to reduce the EU's reliance on U.S.-based payment systems like Visa and Mastercard. This initiative, which has been discussed for six years, gained urgency as the EU seeks greater strategic autonomy in finance, energy, and defense sectors. Recent meetings focused on setting limits for individual holdings of the digital euro to mitigate risks to bank liquidity, with proposed caps around €3,000 to €4,000 being considered. Despite broad political support, the European Parliament has yet to finalize legislation, although the European Central Bank aims to have regulatory frameworks ready by mid-2026. The ECB plans to provide the underlying architecture for the digital euro, enabling private sector development of payment solutions across the 27-nation bloc. These efforts mark a significant step toward a pan-European payment system that supports online commerce while enhancing Europe’s financial independence.