The European Parliament's Committee on Economic and Monetary Affairs approved its position on the digital euro package with 43 votes in favor and 14 against, opening negotiations between the European Parliament and the Council of the EU. The vote advances the eurozone's push toward its first central bank digital currency, with the European Central Bank maintaining a possible launch target in 2029 pending completion of legislative and technical steps. Member of the European Parliament Fernando Navarrete Rojas emphasized the package protects citizens' freedom to choose payment methods and stressed the digital euro would complement cash without replacing it, addressing concerns over financial surveillance and payment autonomy.
Digital Euro Features Zero-Knowledge Privacy and Offline Payments
Under the approved draft, the European Central Bank would issue the digital euro for both online and offline use. Online payments would be processed through payment intermediaries, while offline payments would rely on local storage on a user's device. The offline model operates similarly to cash: if a user loses the device holding offline digital euros, the funds could be lost without compensation.
The draft incorporates privacy by default through zero-knowledge proof technology, allowing transaction verification without exposing personal data. According to the proposal, the ECB would not have access to users' personal identification information. This privacy framework responds to criticism from crypto advocates, privacy groups, and politicians who warned that a central bank digital currency could enable financial surveillance.
European Commission to Set Holding Limits for Digital Euro Balances
To protect financial stability, holding limits would be introduced for digital euro balances. The European Commission would set these limits based on European Central Bank recommendations. Digital euro balances would not earn interest.
Businesses would be allowed to hold digital euros only temporarily, for no more than 24 hours, to collect incoming payments. Companies would generally be required to accept the new currency, though 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.
ECB Outlines 2026–2029 Implementation Timeline
Before the digital euro can launch, the European Central Bank 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 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 to roughly 350 million residents.
Qivalis Expands to 37 Members Ahead of 2026 Stablecoin Launch
While the ECB project moves through the legislative process, private euro stablecoin efforts are gaining momentum. The European banking consortium Qivalis 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.
Recent Brighty data shows Spain leads early retail adoption of Circle's EURC. Dollar-denominated stablecoins still dominate the market, accounting for roughly 98% of global stablecoin activity. That dominance has pushed European institutions to seek stronger euro-based digital payment options.
Bank of Italy Governor Fabio Panetta argued last year that regulation alone would not counter the crypto market. In his view, Europe also needs a digital euro offering similar convenience with state-backed guarantees. Rojas said the public and private approaches should not be seen as rivals, stating the need for a digital euro and private payment solutions to work together.
The committee vote is an important step, but interinstitutional negotiations, a final European Parliament vote, and approval by the EU Council still lie ahead. China's e-CNY pilot, launched in 2019, reached millions of users but faced difficulties with mass adoption.
FAQ
What did the European Parliament's Committee on Economic and Monetary Affairs approve?
The committee approved its position on the digital euro package with 43 votes in favor and 14 against, opening negotiations between the European Parliament and the Council of the EU. The vote advances the eurozone's push toward its first central bank digital currency, with the European Central Bank maintaining a possible launch target in 2029.
How does the digital euro protect user privacy?
The approved draft incorporates privacy by default through zero-knowledge proof technology, allowing transaction verification without exposing personal data. According to the proposal, the European Central Bank would not have access to users' personal identification information.
When is the digital euro expected to launch?
ECB Executive Board member Piero Cipollone outlined a timeline in February under which EU lawmakers are expected to adopt the regulation in 2026, followed by a 12-month pilot program in the second half of 2027. A full launch could then follow in 2029.
