The European Parliament has voted in favour of legislation supporting a digital euro that would function both online and offline, marking a significant step forward for the European Union’s central bank digital currency project. The decision brings Parliament into closer alignment with the European Central Bank and the Council of the EU, increasing the likelihood of a unified negotiating position later this year.
The vote endorses a dual functionality model, allowing the digital euro to be used for internet-based payments as well as offline transactions, such as device-to-device payments without a network connection. For the ECB, which has consistently argued that both modes are essential, the outcome reinforces its preferred design architecture ahead of trilogue negotiations.
The decision matters beyond technical design. It signals political backing for a digital euro that can operate as a genuine public alternative to private payment platforms, while also preserving access to payments during network outages or in areas with limited connectivity.
A Strategic Payments Debate
The digital euro proposal forms part of the EU’s broader effort to safeguard monetary sovereignty and reduce dependence on non-European payment providers. Lawmakers backing the online functionality argue that limiting the digital euro to offline use would significantly restrict its utility in e-commerce and cross-border transactions within the euro area.
At the same time, the offline component remains politically sensitive and strategically important. It is designed to replicate certain features of cash, particularly privacy and resilience. The ECB has previously indicated that offline payments would not be recorded centrally, addressing concerns about surveillance and data protection.
By endorsing both functionalities, Parliament has effectively supported a balanced compromise between privacy, usability, and financial stability. The final regulation will still need to define holding limits, intermediary roles, and safeguards against large-scale deposit outflows from commercial banks.
Implications for the ECB’s Timeline
The vote strengthens the legislative foundation for the next phase of negotiations between Parliament, the Council, and the European Commission. If co-legislators reach agreement, the ECB could move from its current preparation phase towards full-scale development and testing.
The central bank has stressed that a final issuance decision would only follow once the legal framework is in place. However, political alignment among EU institutions reduces uncertainty and provides a clearer direction for banks, payment providers, and fintech firms preparing for integration.
For euro area citizens and businesses, the outcome signals that the digital euro remains firmly on the EU policy agenda. While scepticism persists in parts of the political spectrum, institutional momentum now appears stronger than at any point since the Commission first proposed the regulation.
The next stage will determine how far Europe is willing to go in reshaping its retail payments landscape, and how the digital euro will coexist with cash, cards, and private digital payment solutions across the single currency area.
Related: European Parliament Tests Its Nerve on the Digital Euro