European Lawmakers Back Key Step in ECB Digital Euro Rollout

Here’s a more refined and slightly tighter rewrite:

EU lawmakers have advanced plans for a European Central Bank (ECB) digital euro by 2029, approving a legal framework aimed at reducing dependence on U.S.-dominated card networks and stablecoin providers.

The European Central Bank cleared a key hurdle after the European Parliament’s Economic and Monetary Affairs (ECON) committee voted Tuesday to endorse the draft legislation for a digital euro.

The committee also greenlit the start of final “trilogue” talks between EU member states and the Parliament, moving the proposal closer to formal adoption.

The vote follows three years of negotiations between policymakers and commercial banks, which have warned the project could accelerate deposit outflows and erode fee income.

The initiative is intended not only to modernize payments but also to reinforce Europe’s monetary sovereignty. ECB President Christine Lagarde has repeatedly argued that a central bank digital currency is needed to counter the growing influence of dollar-backed stablecoins such as USDT and USDC.

Lagarde has also sought to ease privacy concerns, emphasizing that cash will remain available and that the digital euro is designed to complement, not replace, physical currency.

EU officials note that nearly two-thirds of eurozone card transactions are processed by non-European companies, mainly Visa and Mastercard, highlighting the bloc’s reliance on foreign payment infrastructure.

Markus Ferber, a senior ECON committee member, said strengthening payment resilience has become a geopolitical necessity, warning against dependence on a limited number of external providers.

Under the framework, the ECB could launch both online and offline versions of the digital euro by 2029. The offline mode would allow device-to-device payments without internet access, designed to replicate cash-like privacy by limiting transaction visibility even for the central bank.

The development comes shortly after the U.S. Senate approved a four-year ban on central bank digital currencies, with the bill now heading to the House of Representatives.

Banks have lobbied for strict holding limits on digital euro wallets to reduce the risk of large-scale deposit shifts during financial stress.

The ECB will now proceed with a 12-month pilot phase, testing a beta version with selected merchants and payment providers before broader deployment.

Ferber summarized the intent: “The euro must work in your pocket and on your phone.”