The creation of an EU-issued digital euro moved a step closer Tuesday after a key European Parliament committee vote.
The EP’s Economic and Monetary Affairs Committee (ECON) approved its position on the digital euro package with a 43–14 vote, according to an official announcement on Tuesday.
Fernando Navarrete Rojas, a member of the European Parliament (MEP), said the package “protects citizens’ freedom to choose how they pay,” adding that the digital euro would “complement cash, never replace it.”
The vote marks a key step in shaping the rules for the EU’s potential central bank digital currency (CBDC), as the European Central Bank (ECB) targets a 2029 digital euro launch.
Privacy and offline payments at core
Under the approved draft, the digital euro would be issued by the ECB and function both online and offline.
Online payments would use an account-based system, while offline payments would operate through local device storage, similar to cash in terms of user control.
“The offline functionality would be equivalent to using physical cash, as losing the device would mean losing the offline money with no refund possible,” the announcement read.
Source: ECB
The proposal includes privacy-by-design features, including technologies such as zero-knowledge proofs (ZKPs) to verify transactions without exposing personal data. “The ECB would not have access to personal identification data,” the announcement said.
Digital euro won’t pay interest
The draft also introduces holding limits to protect financial stability, with caps on how much digital euro individuals can hold. These limits would be set by the European Commission based on ECB recommendations and reviewed regularly.
The currency would not pay interest, and businesses would only be allowed to hold digital euros temporarily to accumulate incoming payments for up to 24 hours. Businesses would generally be required to accept the digital euro, with some exceptions for very small firms and self-employed operators who do not already accept digital payments.
Related: ECB signs standards deals to cut digital euro integration costs
Basic services such as account access and payments would be free, while additional services could carry capped fees for providers. Offline transactions would remain free under the proposal.
Wider rollout and institutional roles
The legislation also outlines a broader distribution model involving banks, payment providers and regulated crypto firms. Post offices and e-money providers could also distribute the digital euro across the eurozone.
Before launch, the ECB would need to finalize technical rules, run pilot tests and coordinate with payment providers. A rollout period of at least two years would follow approval of the final law.
Related: ECB official says stablecoins risk importing old market flaws
The latest approval marks clearing a key hurdle to rollout of digital euro after the ECB laid groundwork for a CBDC in 2020.
The project has faced repeatedly delays due to unfinalized legislation, with ECB Executive Board member Piero Cipollone projecting as recently as September that the digital euro would likely not launch until 2029.
EU consortium moves ahead with regulated stablecoin
Last month, Qivalis, a European banking consortium developing a regulated euro stablecoin, expanded to 37 member institutions after adding 25 new banks across 15 countries.
The new members include ABN AMRO, Rabobank, Nordea and Intesa Sanpaolo. The Amsterdam-based consortium is targeting a second-half 2026 launch, according to a statement shared with Cointelegraph.
“We are not merely building payment rails; we are ensuring that European principles around data protection, financial stability and regulatory rigour are embedded into the next generation of digital money,” said Howard Davies, chairman of Qivalis’ supervisory board.
The move comes as European institutions race to establish alternatives to US dollar-dominated stablecoins, which currently account for 98% of the market, according to CoinGecko.
“Europe does not have to choose between the digital euro and successful private payment solutions. We need both to work together,” MEP Rojas said in an email response to Cointelegraph’s query. “The agreement recognizes the right dual approach: existing standards and infrastructure should be reused wherever possible and, where new standards are necessary, they should be open and accessible to banks, payment providers and innovative solutions.”
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