Parliament vote clears path for 2029 digital euro launch

The European Parliament last week gave its formal backing to the digital euro, with nearly 70% of lawmakers voting in favour. The approval sets the stage for trilogue negotiations between the Parliament, the European Commission, and the Council of the EU to begin this month. The ECB hopes to have the final legislative text agreed upon by the end of 2026.

Assuming the political process stays on track, the central bank plans to launch a pilot phase in 2027 and issue the digital euro for the first time in 2029. Piero Cipollone, a member of the ECB's Executive Board, warned that any legislative delays would push back this timetable, though the project's design would remain intact.

For Europe's banking sector, the digital euro represents a direct route to cutting operational costs. Banks currently pay significant fees to non-European international card networks to offer cross-border payment capabilities. By using the digital euro, banks would eliminate these costs. Existing national payment apps, such as Portugal's MB WAY, will be able to integrate the digital euro's functionalities directly rather than relying on co-badging with foreign schemes.

The project also addresses a structural vulnerability in the European economy. Currently, two-thirds of card payments in Europe are processed by non-European systems. In 13 of the 21 euro area countries, including Finland and Croatia, consumers rely entirely on international card schemes because no domestic alternative exists. Cipollone argued that shifting payments to European-governed infrastructure is vital for monetary sovereignty and strategic autonomy.

Consumers will gain a pan-European payment method that works uniformly across the bloc, alongside a unique offline capability. The digital euro will allow users to make payments by bringing two smartphones together without an internet connection. Cipollone cited the major blackout that hit Spain and Portugal last year as an example of when this functionality would prove essential.

The ECB is also pushing for the final legislation to guarantee that all Europeans have the option of using a dedicated digital euro app developed by the central bank. This would ensure universal access and resilience during exceptional circumstances. The move comes as the United States has abandoned its own digital dollar project, though Cipollone noted that the digital euro can coexist with euro-denominated stablecoins being developed by European banks.