EU Parliament Backs Digital Euro Framework * Science and Technology Times

The European Parliament has given its first major approval to the digital euro, aligning closely with the European Council on creating a central‑bank‑issued currency usable both online and offline.
Lawmakers say the move is essential for strengthening the EU’s monetary sovereignty and reducing reliance on non‑European payment providers.
The endorsement clears a key political hurdle for the European Central Bank, which aims for a potential 2029 launch.

Parliament Signals Support for a Digital Euro

The European Parliament has endorsed the European Council’s negotiating position on the digital euro, marking a significant step toward establishing a central bank digital currency. The approval is important because the European Central Bank cannot issue a digital euro without Parliament’s legislative backing. This alignment represents a shift from earlier parliamentary proposals that focused solely on offline payments. Lawmakers now support a model that includes both online and offline functionality to ensure broad usability.

The ECB has been developing the digital euro to maintain the role of central bank money in an increasingly digital economy. Officials argue that the currency would help reduce dependence on non‑European payment providers. Concerns about geopolitical tensions and fragmented payment systems have intensified interest in a homegrown digital alternative. Some EU countries currently lack domestic payment networks entirely, increasing reliance on U.S. companies such as Visa and Mastercard.

Progress on the project had stalled for more than two years due to resistance from banking groups in countries like Germany. The delay exceeded the ECB’s expectations and raised questions about political support. Tuesday’s vote indicates that momentum has returned. Lawmakers approved two amendments calling for equal access to payment services and a new form of public money available both online and offline.

Monetary Sovereignty at the Center of the Debate

Members of Parliament emphasized that a digital euro would reinforce the EU’s monetary sovereignty. They argue that relying heavily on private or non‑EU payment systems poses long‑term risks. A central‑bank‑issued digital currency could help reduce fragmentation in retail payments across the bloc. It would also support the functioning of the single market by ensuring consistent access to secure payment options.

Advocates say the digital euro would complement existing cash rather than replace it. Laura Casonato, head of policy at Positive Money Europe, described the vote as a major win for the project. She said the digital euro represents an inclusive future form of cash backed by the central bank. Her comments reflect growing support among civil society groups for a public digital payment option.

The Parliament’s resolution also calls on the ECB to improve monitoring of crypto‑assets. Lawmakers warn that leaving digital payments entirely to private or non‑EU providers could create new forms of exclusion. They argue that public oversight is necessary to ensure fairness and accessibility. The digital euro is seen as one part of a broader strategy to modernize Europe’s financial infrastructure.

The ECB aims for a potential launch in 2029, but the timeline depends on continued political agreement. Parliament’s endorsement brings the project closer to that goal. Further negotiations with the Council and Commission will shape the final design. The next phase will focus on technical details, privacy protections and distribution models.

Updating Europe’s Digital Finance Framework

The digital euro initiative is part of a wider effort to update Europe’s digital finance rules. The Digital Services Act and other regulatory frameworks have already reshaped how online platforms operate. The digital euro would add a new layer to this ecosystem by providing a public digital payment option. Lawmakers see it as a way to ensure that Europe remains competitive in a rapidly evolving financial landscape.

The ECB has been conducting research and pilot projects to test potential designs. These include offline payment capabilities, which would allow transactions without an internet connection. Such features are intended to make the digital euro accessible to all users, including those in areas with limited connectivity. The Parliament’s support for both online and offline functionality aligns with the ECB’s vision.

Banking groups remain cautious about the project. Some fear that a digital euro could shift deposits away from commercial banks. Policymakers have proposed safeguards to limit such risks, including caps on digital euro holdings. These discussions will continue as the legislative process advances. The final framework will need to balance innovation with financial stability.

The Parliament’s vote signals that political support for the digital euro is solidifying. As negotiations progress, the focus will shift to implementation and public communication. Ensuring trust and transparency will be essential for widespread adoption. The coming years will determine whether the digital euro becomes a central feature of Europe’s financial system.