EU Lawmakers Advance Digital Euro Plan After Key Parliament Vote

The European Union moved closer to launching a digital euro after the European Parliament’s Economic and Monetary Affairs Committee approved its position on the proposed legislation in a 43-14 vote.

The package outlines the framework for a central bank digital currency issued by the European Central Bank. EU officials say the digital euro is designed to work alongside physical cash rather than replace it.

Member of the European Parliament Fernando Navarrete Rojas said the proposal protects citizens’ freedom to choose how they make payments while ensuring access to both digital and traditional money options.

Privacy and Offline Payments Become Central Features

Under the draft rules, the digital euro would support both online and offline transactions. Online payments would operate through an account-based system, while offline payments would use local device storage similar to physical cash.

Lawmakers said losing a device holding offline digital euro funds could result in permanent loss of those funds, much like losing physical money.

The proposal also includes privacy protections using technologies such as zero-knowledge proofs, allowing transactions to be verified without exposing personal user data. According to the draft, the ECB would not have access to personal identification information.

Holding Limits and Business Rules Included

The legislation introduces limits on how much digital euro individuals can hold in order to protect financial stability across the banking system. The European Commission would set those limits based on ECB recommendations.

The digital euro would not generate interest payments. Businesses could temporarily hold digital euro payments for up to 24 hours, while small firms and self-employed workers may receive exemptions from mandatory acceptance rules.

The ECB is targeting a possible digital euro launch by 2029 following testing, technical preparation and final approval of the legislation.