Changes from report parliamentary committee draft to plenary report

RemovedArticle 8 – paragraph 1: deleted

Added(73) Payment service providers should be able to process personal data in so far as it is necessary to fulfil tasks that are essential to the proper functioning of the digital euro. In line with Article 6(1)(c) of Regulation (EU) 2016/679, processing activities should be considered lawful as regards the digital euro if and to the extent that they are necessary for compliance with a legal obligation to which the controller is subject pursuant to this Regulation. In the framework of this regulation, the processing of personal data for the purposes of the enforcement of holding limits, the initiation of the funding and de-funding of a user’s holdings, and the management of local storage devices for offline digital euro payments are tasks in the public interest that are essential for the protection of citizens making use of the digital euro as well as for the stability and integrity of the Union's financial system. Payment service providers will be the controller of personal data as regards these tasks and should ensure that data about digital euro users is never unlawfully transferred to third country authorities or any other entities. In addition, payment service providers may process personal data to comply with existing tasks in the public interest or for compliance with a legal obligation established in Union law that apply to funds defined in Directive (EU) 2015/2366. These tasks apply to the provision of payment services and the prevention and detection of fraud in accordance with Directive (EU) 2015/2366, combatting money laundering and terrorist financing in accordance with Directive (EU) 2015/849, the fulfilment of obligations related to taxation and tax avoidance, and the management of operational and security risks in line with Regulation (EU) 2022/255.

RemovedArticle 8 – paragraph 2: 2. The digital euro shall have legal tender status for payments of a monetary debt denominated in euro to a payee residing or established in the euro area.

Added(74) Any processing of personal data to verify whether users are listed persons or entities pursuant to restrictive measures adopted in accordance with Article 215 TFEU should be in line with Regulation (EU) 2016/679 of the European Parliament and of the Council. Processing of the names and the payment account identifiers of natural persons is proportionate and necessary to ensure the compliance with restrictive measures adopted in accordance with Article 215 TFEU providing for asset freeze or prohibition of making funds or economic resources available.

RemovedArticle 9 – paragraph 1 – point a: (a) where the payee is an enterprise which employs fewer than 50 persons or whose annual turnover or annual balance sheet total does not exceed EUR 10 million, or is a non-profit legal entity as defined in Article 2, point (18), of Regulation (EU) 2021/695 of the European Parliament and of the Council44;

Added(75) Offline digital euro payment transactions are payments that occur in close physical proximity (“face-to-face”). They have similarities with transactions in cash and should be treated in a similar way in terms of privacy. Payment service providers should therefore not process personal data related to offline digital euro payment transactions, but only personal data related to depositing or withdrawing digital euros from digital euro payment accounts to load them onto the local storage devices, or from the local storage devices into the digital euro payment accounts This includes the identifier of the local storage devices which payment service providers attribute to a digital euro user that holds offline digital euro. That level of privacy would be comparable to withdrawals of banknotes at automatic teller machines when payment service providers process personal data related to a user’s identity and data pertaining to how funding and defunding transactions have been carried out. That means that no transaction data monitoring should occur for offline digital euro payment transactions.

RemovedArticle 9 – paragraph 1 – point c: (c) where the payee is a natural person acting as self-employed in a commercial activity or in the course of a purely personal or household activity;

Added(76) The European Central Bank and national central banks may process personal data in so far as it is strictly necessary to fulfil tasks that are essential to the proper functioning of the digital euro. In the framework of this regulation, the processing of personal data for the purposes of the settlement of digital euro payment transactions and the management of the security and integrity of the digital euro infrastructure are tasks in the public interest that are essential for the protection of citizens making use of the digital euro as well as for the stability and integrity of the Union's financial system. The task of maintaining the security and integrity of digital euro infrastructure includes activities related to ensuring the stability and operational resilience of the digital euro. The European Central Bank and national central banks would be the controller of personal data as regards these tasks. The European Central Bank and national central banks would process personal data for these tasks using state-of-the-art security and privacy-preserving measures, such as pseudonymisation or encryption, to ensure that data cannot be used to directly identify a specific digital euro user.

RemovedArticle 10 – paragraph 1: Payees subject to the obligation to accept the digital euro shall use only contractual terms that have been individually negotiated or commercial practices that have the objective or effect of excluding the use of the digital euro by payers of monetary debts denominated in euro. / Contractual terms or commercial practices as referred to in the first subparagraph shall not be binding on the payer. / Contractual terms shall not be regarded as having been individually negotiated where they have been drafted in advance and where the payer has not been able to influence their substance, particularly in the context of a pre-formulated standard contract.

Added(76a) When processing personal data required for the fulfilment of its tasks under this Regulation, the European Central Bank should ensure that only the personal data specifically referred to in this Regulation is accessed and that that information is only accessed when such data is fundamental for the execution of the tasks which entitle the European Central Bank to access the data. In no circumstance should the European Central Bank have access to any personal identification data of any natural person.

RemovedArticle 11 – title: Other adequate exceptions of a monetary law nature

Added(77) For the purpose of enforcing the holding limits and ensuring the exceptional switching of digital euro payment accounts in emergency situations upon the request of the digital euro user, a single access point of digital euro user identifiers and the related digital euro holding limits is necessary to ensure the efficient functioning of the digital euro across the entire euro area, as digital euro users may hold digital euro payment accounts in different Member States. When establishing the single access point, the European Central Bank and national central banks should ensure that the processing of personal data is minimised to what is strictly necessary and that data protection by design and by default is embedded. The European Central Bank and national central banks should consider, where appropriate and to minimise the risk of data breaches, the use of decentralised data storage.

RemovedArticle 11 – paragraph 1: The Commission is empowered to adopt delegated acts in accordance with Article 38 to supplement this Regulation by identifying other adequate exceptions of a monetary law nature to the principle of mandatory acceptance. Those exceptions shall be justified by an objective of public interest and, proportionate to that aim, shall not undermine the effectiveness of the legal tender status of the digital euro, and shall only be permitted provided that other means for the payment of monetary debts are available. When preparing those delegated acts, the Commission shall consult the European Central Bank and, where non-euro area Member States are concerned, the relevant national central bank.

Added(78) With its package on the prevention of the use of the financial system for the purposes of money laundering and terrorist financing, adopted by the Commission on 21 July 2021, (‘AML-package’), the Commission has proposed to significantly strengthen anti-money laundering (‘AML’) rules across the Union. In keeping with that objective and to ensure an effective application of AML/CFT requirements to the digital euro, this Regulation should provide that online digital euro payment transactions are subject to AML/CFT requirements laid down in Directive (EU) 2015/849.

RemovedArticle 13 – paragraph 1 – subparagraph 1 – introductory part: Within the framework of Directive (EU) 2015/2366, payment service providers may provide the digital euro payment services set out in Annex I to this Regulation for offline digital euro and in Annex Ia to this Regulation for online digital euro to:

Added(79) To facilitate the widespread uptake of the digital euro, it is essential that prospective digital euro users can easily access digital euro payment services provided by payment services providers in a harmonised manner across the euro area. It is therefore appropriate, without any prejudice to the risk approach underpinning the AML-package, for the anti-money laundering authority of the Union (‘AMLA’) to address the opening of digital euro payment accounts in its Regulatory Technical Standards on customer due diligence. For low-risk transactions or business relationships, AMLA should identify relevant simplified due diligence measures that payment services providers should apply. AMLA should prioritise the development of these Regulatory Technical Standards.

RemovedArticle 13 – paragraph 1 – subparagraph 2: The European Central Bank may restrict the access to and use in time of the online digital euro for the digital euro users referred to in points (b) and (c) subject to the conditions laid down in Article 16.

Added(80) In contrast to offline digital euro payment transactions, online digital euro payment transactions are not limited to physical proximity transactions, and can be used to transfer funds at distance between digital euro users. For online digital euro payment transactions, central bank digital currencies could present greater AML/CFT risks than cash as they would be acting as an instrument whose liquidity is similar to that of cash but without the limitations on portability that are implicit in cash. It should therefore be laid down that an online digital euro payment transaction is to be subject to Directive (EU) 2015/849 of the European Parliament and of the Council, and Regulation (EU) 2015/847 of the European Parliament and of the Council.

RemovedArticle 13 – paragraph 1 – subparagraph 2 a (new): The access to and use of the automatic funding and defunding of the online digital euro shall be restricted in the cases referred to in point (c).

Added(81) In order to ensure a consistent application of the legal tender requirements and keep pace with technological developments, the power to adopt acts in accordance with Article 290 of the TFEU should be delegated to the Commission to supplement this Regulation by adopting delegated acts in respect of additional exceptions to mandatory acceptance of the digital euro, of the interaction between AML/CFT requirements and the provision of basic digital euro payment services, of the overall ceiling for limits on the digital euro holdings, ▌the types of personal data processed by payment services providers, the European Central Bank and the national central bank and providers of support services, and of the additional or accumulated offline digital euro transaction and holding limits due to AML/CFT consideration. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

RemovedArticle 13 – paragraph 2: 2. Payment service providers that provide servicing payment services within the meaning of Directive (EU) 2015/2366 shall enable online digital euro users to manually fund or defund their online digital euro payment accounts, whether held within the same or another payment service provider, from or to non-digital euro payment accounts, or offline digital euro device, or euro banknotes and coins when a payment services provider provides cash services, subject to any limitations laid down in Article 16 of this Regulation.

Added(82) While offline digital euro payment transactions have similarities with transactions in cash and should be treated in a similar way in terms of privacy specific holding and transaction limits for offline proximity payments are essential to mitigate AML/CFT risks. Power is conferred to the Commission to adopt delegated acts to set additional individual or accumulated offline digital euro transaction limits or holding limits due to AML/CFT considerations, in addition to any financial stability considerations which lead to the definition of a quantitative limit to digital euro holdings set by the European Central Bank.

RemovedArticle 13 – paragraph 2 a (new): 2a. Payment service providers that provide servicing payment services within the meaning of Directive (EU) 2015/2366 shall enable online digital euro users to automatically fund or defund their online digital euro payment accounts held within the same payment service provider, from or to non-digital euro payment accounts, subject to any limitations laid down in Article 16 of this Regulation.

Added(83) In order to ensure uniform conditions for the application of the euro-area uniform caps for both inter-payment service fees and merchant service charges, of a new cost based compensation model and its updates, of equivalent supervisory and regulatory requirements of third country jurisdictions, and of effective interoperability and access for providers of front-end services, ▌implementing powers should be conferred on the Commission. Those powers should be exercised in accordance with Regulation (EU) No 182/2011 of the European Parliament and of the Council. The examination procedure should be used for the adoption of the implementing acts specifying the transaction and holding limits of the offline digital euro, given that those acts contributes to the fight against money laundering and terrorist financing.

RemovedArticle 13 – paragraph 2 b (new): 2b. Payment service providers shall make available manual funding and defunding functionalities to natural persons using the offline digital euro from cash, an online digital euro account, or any non-digital euro payment account designated by the offline digital euro user subject to any limitations laid down in Articles 16 and 37.

Added(83a) The full extent of possibilities regarding the use of the digital euro should continue to be enhanced after the entry into force of this Regulation, building on the experience that will be gained from the first few years of transactions carried out using the digital euro. In particular, for the offline digital euro payment functionality, and given that local storage devices might be able to securely communicate with each other via communication channels that do not require physical proximity, the Commission, with the technical support of the European Central Bank and AMLA, should assess the possibility of an offline digital euro payment transaction being possible even when the two local storage devices of the payer and the payee are not in physical proximity. The Commission should present a report to the European Parliament and to the Council on that matter by three years from the first issuance of the digital euro.

RemovedArticle 13 – paragraph 2 c (new): 2c. Payment service providers shall enable their merchant clients to automatically defund their offline digital euro devices to non-digital euro payment accounts designated by the merchant.

Added(83b) With a view to further enhancing the privacy of the online digital euro payment functionality and to widening the potential usability of the digital euro, the Commission, with the technical support of AMLA, should assess the potential application of specific AML rules to low-value online digital euro payment transactions, which is compatible with the specific risk profile of such transactions.

RemovedArticle 13 – paragraph 3 – point a: (a) at any point in time where funding and defunding take place through non-digital euro payment accounts, through offline digital euro devices or online digital euro payment accounts;

Added(84) In accordance with the principle of proportionality, it is necessary and appropriate for the achievement of the basic objective of ensuring that the euro is used as a single currency in a digitalised economy to lay down rules concerning in particular its issuance, legal tender status, distribution, use, privacy and data protection and essential features of the digital euro. This Regulation does not go beyond what is necessary in order to achieve the objectives pursued, in accordance with Article 5(4) on the Treaty on European Union.

RemovedArticle 13 – paragraph 4 – subparagraph 1 – introductory part: Payment service providers providing account servicing payment services within the meaning of Directive (EU) 2015/2366 shall enable online digital euro users:

Added(85) The European Data Protection Supervisor and the European Data Protection Board were consulted in accordance with Article 42 of Regulation (EU) 2018/1725 of the European Parliament and of the Council and delivered a joint opinion on [XX XX 2023].

RemovedArticle 13 – paragraph 4 – subparagraph 1 – point a: (a) to have their online digital euros in excess of any limitations adopted in accordance with Article 16 automatically defunded to a non-digital euro payment account, where an online digital euro payment transaction is received;

Added1. With a view to providing a sovereign and secure digital means of payment throughout the euro area, safeguarding public access for Union citizens to central bank money in digital form, and ensuring people’s freedom to choose how to pay, this Regulation establishes the digital euro as a new form of retail central bank digital currency that is a complement to cash.

RemovedArticle 13 – paragraph 4 – subparagraph 2: For the purpose of points (a) and (b), and upon prior approval by the digital euro users, payment service providers shall link each online digital euro payment account to a single non-digital euro payment account designated by the digital euro users. Digital euro users shall be allowed to have that designated non-digital euro payment account with a different payment service provider than the one where a given online digital euro payment account is held.

AddedThis Regulation lays down rules concerning, in particular, the issuance, legal tender status, distribution, use, privacy and data protection aspects, and essential technical features of the digital euro.

RemovedArticle 13 – paragraph 7: 7. Natural persons shall not have more than one offline digital euro device.

AddedFor the purpose of this Regulation, the following definitions shall apply:

RemovedArticle 13 – paragraph 7 a (new): 7a. Digital euro users may have one or more online digital euro payment accounts, with the same or different payment service providers.

Added1. ‘digital euro’ means the digital form of the single currency, available to natural and legal persons, whether used through its online payment functionality or its offline payment functionality, issued by the European Central Bank or the national central banks, constituting a direct liability on the balance sheet of those entities towards the digital euro user and constituting a property right of the digital euro user;

RemovedArticle 13 – paragraph 8: 8. From the date of issuance of the digital euro, payment service providers shall make available to their clients, free of charge, accessible information about the specific features of digital euro payment services and the conditions of their distribution.

Added1 a. ‘online digital euro payment functionality’ means the functionality of the digital euro that enables online digital euro payment transactions to be processed and settled through the digital euro settlement infrastructure in an account-based system;

RemovedArticle 14 – paragraph 1: 1. For the purpose of distributing the digital euro to natural persons referred to in Article 13(1)(a), credit institutions that provide payment services as referred to in points (1), (2) or (3) of Annex I to Directive (EU) 2015/2366 shall, upon request of their clients, provide those persons with all basic digital euro payment services as referred to in Annexes II and IIa to this Regulation.

Added1 b. ‘offline digital euro payment functionality’ means the functionality of the digital euro, that is accessible through a local storage device and that enables offline digital euro payment transactions to be stored, processed and executed through such a device, where the settlement of individual transactions takes place between the local storage devices of the payer and the payee;

RemovedArticle 14 – paragraph 2: 2. For natural persons referred to in Article 13(1)(a) that do not hold a non-digital euro account, Chapter IV of Directive (EU) 2014/92 shall apply, with the exception of Articles 17 and 18, to the access to online digital euro account with basic services by consumers.

Added2. ‘credit institution’ means a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council;

RemovedArticle 14 – paragraph 3 – point a: deleted

Added3. ‘digital euro payment transaction’ means an act, initiated by a payer or on his or her behalf, or by the payee, of placing, transferring or withdrawing digital euro, irrespective of any underlying obligations between the payer and the payee;

RemovedArticle 14 – paragraph 4: 4. Payment service providers referred to in paragraphs 1 to 3 shall provide digital inclusion support to their clients with disabilities, functional limitations or limited digital skills, and elderly persons. Without prejudice to paragraph 3, point (b), digital inclusion support shall comprise a dedicated assistance for onboarding to the digital euro payment services and using all basic digital euro services.

Added3a. ‘online digital euro payment transaction’ means a digital euro payment transaction where the settlement of the transaction takes place in the digital euro settlement infrastructure;

RemovedArticle 14 – paragraph 5: 5. The anti-money laundering authority of the Union (‘AMLA’) established under Regulation (EU) 2024/1620 of the European Parliament and of the Council1a and the European Banking Authority shall jointly issue guidelines specifying the interaction between AML/CFT requirements and the provision of basic digital euro payment services with a particular focus on financial inclusion of vulnerable groups including asylum seekers or beneficiaries of international protection, individuals with no fixed address or third country nationals who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons. Those guidelines shall reflect the intrinsic distinctive AML/CFT risk profiles of basic online and offline digital euro payment services. / 1a Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) No 1094/2010 and (EU) No 1095/2010 (OJ L, 2024/1620, 19.6.2024, ELI: http://data.europa.eu/eli/reg/2024/1620/oj)

Added3b. ‘offline digital euro payment transaction’ means a digital euro payment transaction made in physical proximity between the local storage device of the payer and the local storage device of the payee, where authorisation and settlement of the transaction take place in the certified local storage devices of both payer and payee without recourse to the digital euro settlement infrastructure and with no third-party involvement;

RemovedArticle 15 – paragraph 1: 1. With a view to enabling natural and legal persons to access and use the digital euro and to contributing to the stability of the financial system, the use of the digital euro as a store of value shall be subject to holding limits that will be the same across all euro area Member States and respect the principle of proportionality.

Added4. ‘digital euro user’ means a natural or legal person making use of a digital euro payment service in the capacity of payer, payee, or both;

RemovedArticle 15 – paragraph 2: 2. With a view to ensuring an effective use of the digital euro as a legal tender means of payment, and to avoiding excessive charges for merchants subject to the obligation to accept the digital euro under Chapter II while providing appropriate and fair compensation for the relevant costs incurred by payment services providers for the mandatory provision of digital euro payment services, the level of charges or fees to be paid by natural persons or merchants to payment service providers, or between payment service providers, shall be subject to limits.

Added5. ‘digital euro payment account’ means an account held by one or more digital euro users with a payment service provider to access digital euro ▌and to initiate or receive digital euro payment transactions, ▌irrespective of technology and data structure;

RemovedArticle 16 – paragraph 1: 1. For the purpose of Article 15(1), legal persons shall not maintain any digital euro holdings. In the event of a temporary network disruption due to force majeure events, legal persons may temporarily maintain holdings in their offline digital euro device with no limits. As soon as the network disruption has come to an end, automatic defunding in accordance with Article 13(2c) shall be provided.

Added5a. ‘local storage device’ means a physical device with tamper resistant software and hardware requirements defined by the European Central Bank to ensure the safety, resilience and integrity of offline digital euro transactions by allowing for the secure electronic storage of digital euro holdings and transaction information and the secure processing and execution of offline digital euro payment transactions;

RemovedArticle 16 – paragraph 2 – introductory part: 2. For the purpose of Article 15(1), the holdings of digital euro that natural persons may hold shall be limited.

Added6. ‘European Digital Identity Wallets’ means the European Digital Identity Wallet as defined in Article 3, point (42), of Regulation (EU) No 910/2014 of the European Parliament and of the Council;