The European Parliament’s Committee on Economic and Monetary Affairs has approved its position on the digital euro package, with 43 votes in favor and 14 against. The vote opens the way for full negotiations between the European Parliament and the Council of the EU, marking the next major stage in the eurozone’s push toward its first central bank digital currency.
Member of the European Parliament Fernando Navarrete Rojas said the package “protects citizens’ freedom to choose their payment method” and stressed that the digital euro would “complement cash, but never replace it.” The European Central Bank remains committed to a possible launch in 2029, although several legislative and technical steps still need to be completed.
Digital Euro Plan Moves Forward With Privacy And Offline Payments
Under the approved draft, the digital euro would be issued by the ECB and operate both online and offline. Online payments would be handled through payment intermediaries, while offline payments would rely on local storage on a user’s device.
That offline model would work in a way similar to cash. If a user loses the device holding offline digital euros, the funds could also be lost without compensation.
The draft also provides for privacy by default through zero-knowledge proof technology. This would allow transactions to be verified without exposing personal data. According to the proposal, the ECB would not have access to users’ personal identification information.
This privacy framework is one of the main responses to criticism from crypto advocates, privacy groups, and politicians who have warned that a central bank digital currency could become a tool for financial surveillance.
To protect financial stability, holding limits would be introduced for digital euro balances. These limits would be set by the European Commission based on recommendations from the ECB. Digital euro balances would not earn interest.
Businesses would be allowed to hold digital euros only temporarily, for no more than 24 hours, in order to collect incoming payments. Companies would generally be required to accept the new currency, although small businesses and self-employed workers that do not accept digital payments would be exempt.
Basic digital euro services and offline transactions would remain free for users.
Roadmap To 2029 Faces Stablecoin Pressure
Before the digital euro can launch, the ECB must approve technical standards, run pilot tests, and build partnerships with payment providers. Once the final law is adopted, the project would enter an implementation period of at least two years.
ECB Executive Board member Piero Cipollone outlined a more detailed timeline in February. Under that plan, EU lawmakers are expected to adopt the regulation in 2026, followed by a 12-month pilot program in the second half of 2027 with a limited number of participants. A full launch could then follow in 2029.
Banks, payment providers, regulated crypto companies, post offices, and e-money providers across the eurozone would be able to distribute the digital euro.
Private Stablecoins Are Moving Faster
While the ECB project moves through the legislative process, private euro stablecoin efforts are gaining momentum.
The European banking consortium Qivalis has expanded to 37 members after 25 new banks from 15 countries joined the initiative. New members include ABN AMRO, Rabobank, Nordea, and Intesa Sanpaolo. The Amsterdam-based group plans to launch a regulated euro-pegged stablecoin as early as the second half of 2026.
The pressure is clear. Dollar-denominated stablecoins still dominate the market, accounting for roughly 98% of global stablecoin activity. That dominance has pushed European institutions to look for stronger euro-based digital payment options.
Bank of Italy Governor Fabio Panetta argued last year that regulation alone would not be enough to counter the crypto market. In his view, Europe also needs a digital euro that can offer similar convenience while carrying state-backed guarantees.
Rojas said the public and private approaches should not be seen as rivals. “We need a digital euro and private payment solutions to work together,” he said.
The committee vote is an important step, but it is not the final one. Interinstitutional negotiations, a final European Parliament vote, and approval by the EU Council still lie ahead. If the legislative process remains on schedule, 2029 remains a realistic target for launching the eurozone’s first CBDC for roughly 350 million residents.
The larger challenge may not be technical or legal, but practical. China’s e-CNY pilot, launched in 2019, reached millions of users but still faced difficulties with mass adoption. The lesson for Europe is clear: building a CBDC is one challenge, convincing people to use it is another.
The digital euro’s privacy protections and holding limits may ease some concerns, but they also create new questions. Offline wallets could make payments more resilient, yet they may also bring cash-like loss risks into a smartphone-based system that has not been tested at full scale.
That is why the rise of private euro stablecoin projects matters. While the digital euro moves through a long policy process, the market is already testing faster alternatives. By the time the ECB is ready for launch, the real question may be whether consumers and businesses still need a public digital euro—or whether their payment habits have already moved elsewhere.
