EU legislators have approved a legal framework for launching a state-backed digital currency by 2029, allowing Europe to reduce its dependence on U.S. credit card and stablecoin companies.
By Olivier Acuna|Edited by Jamie Crawley Jun 23, 2026, 12:37 p.m. 2 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on The EU Parliament's ECON Committee has endorsed the digital euro, paving the way for a central bank-backed stablecoin by 2029. (Marius/Unsplash)SummaryShow- The Economic and Monetary Affairs Committee of the European Parliament has approved the legal framework for a digital euro and initiated trilogue discussions to finalize the legislation, concluding three years of disputes between central and commercial banks.
- Officials from the EU and ECB President Christine Lagarde emphasize that the digital euro is essential for preserving Europe’s monetary independence and lessening dependence on U.S. dollar-linked stablecoins and foreign payment companies like Visa and Mastercard.
- The regulations set the stage for both online and offline versions of the digital euro by 2029, featuring cash-like privacy for offline transactions, limits on holdings to protect banks, and a 12-month pilot program to evaluate the system with specific merchants and payment providers.
The European Central Bank (ECB) achieved a significant milestone as the European Parliament’s Economic and Monetary Affairs (ECON) Committee approved the legal framework for the digital euro on Tuesday.
The committee has also mandated the immediate commencement of trilogue negotiations among EU member states and the Parliament to finalize the legal text.
This vote concludes three years of intense debates between central bankers and commercial banks worried about losing deposit income.
The primary objective of implementing a central bank digital currency (CBDC) extends beyond modernizing payment systems; it aims to uphold the autonomy of the monetary system within the bloc. ECB President Christine Lagarde has consistently advocated for a CBDC to counter the dominance of U.S. dollar-pegged stablecoins like Tether’s USDT and Circle’s (CRCL) USDC.
Lagarde addressed public concerns regarding financial surveillance, stating that cash will remain available and that "one does not exclude the other" regarding the digital euro and physical banknotes.
The EU has noted that approximately two-thirds of card transactions in the eurozone are processed by non-European firms, primarily Visa (V) and Mastercard (MA).
"Enhancing the resilience of payment systems in Europe has become a geopolitical necessity," remarked Markus Ferber, a key member of the ECON Committee on Tuesday.
He added, "In a world characterized by geopolitical tensions, we can no longer afford to be reliant on a few foreign providers for digital payments," reflecting concerns voiced throughout the EU.
The new regulations approved by the ECON Committee facilitate the ECB’s introduction of both online and offline versions of the currency by 2029. Notably, the offline version will enable users to exchange digital euros directly from phone to phone without requiring an internet connection, ensuring cash-like privacy that prevents the ECB from tracking purchases.
Commercial banks successfully advocated for stringent holding limits on the amount that individuals can retain in a digital wallet to mitigate a potential drain of cash from traditional accounts during economic crises.
The ECB is set to launch a 12-month pilot phase to test the infrastructure in real-world conditions with select merchants and payment service providers using a beta version.
"The euro must function in your pocket and on your phone," Ferber concluded.