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EU lawmakers have advanced plans for a European Central Bank (ECB) digital euro by 2029, backing a legal framework designed to reduce dependence on U.S.-dominated payment networks and stablecoin issuers.
The European Central Bank secured a key step forward after the European Parliament’s Economic and Monetary Affairs (ECON) committee voted Tuesday to approve the draft legislation for a digital euro.
The committee also authorized the start of final “trilogue” negotiations between EU member states and the Parliament, bringing the proposal closer to becoming law.
The decision follows three years of discussions between policymakers and commercial banks, which have raised concerns about potential deposit outflows and lost fee revenue.
The project is framed not only as a modernization of payments, but as a move to strengthen Europe’s monetary sovereignty. ECB President Christine Lagarde has repeatedly argued that a central bank digital currency is needed to counter the influence of dollar-backed stablecoins such as USDT and USDC.
Lagarde has also addressed privacy concerns, stressing that cash will remain in circulation and that a digital euro would complement physical money rather than replace it.
EU officials have highlighted that nearly two-thirds of eurozone card transactions are processed by non-European firms, primarily Visa and Mastercard, underscoring reliance on foreign payment infrastructure.
Markus Ferber, a senior ECON committee member, said strengthening payment resilience has become a geopolitical necessity, warning against dependence on a small number of overseas providers.
The approved framework would allow the ECB to launch both online and offline versions of the digital euro by 2029. The offline feature is designed to enable device-to-device payments without internet access, offering cash-like privacy by limiting visibility of transaction data even from the central bank.
The development comes shortly after the U.S. Senate approved a four-year ban on central bank digital currencies, with the measure now moving to the House of Representatives.
Banks have lobbied for strict holding limits on digital euro wallets to prevent large-scale shifts away from traditional deposits during periods of financial stress.
The ECB will now begin a 12-month pilot phase, testing the system with selected merchants and payment providers before wider rollout.
As Ferber put it, “The euro must work in your pocket and on your phone.”
