Digital Euro Clears Key Hurdle in European Parliament

The transformation of the European financial landscape is accelerating: last Tuesday, the deputies validated a major step to modernize the single currency during the European Central Bank’s (ECB) annual policy review. After an in-depth exchange with its president Christine Lagarde, Parliament adopted by a large majority (443 votes for, 71 against, 117 abstentions) a crucial text that outlines the future digital euro, beyond the mere balance sheet of the institution.

The digital euro presented as guarantor of monetary sovereignty

At the heart of the resolution adopted by lawmakers is the explicit recognition of preparatory work concerning central bank digital currency (CBDC). For MEPs, this project is not simply a technological update, but an essential strategic lever.

The text emphasizes the need to strengthen the European Union’s monetary sovereignty in a global economy. The objective is clear: to reduce the differences that persist in retail payments within the euro area.

By unifying transaction methods with a public solution, Europe aims to make its single market more coherent and stronger, according to the same document.

Additionally, the deputies have highlighted a major risk related to the increasing digitization of exchanges, which, if it remains the exclusive domain of private actors — often non-European —, could lead to new forms of exclusion in their view. Traders as well as end users would then become dependent on foreign infrastructures.

To avoid this risk, the digital euro project is supported, as also specified in the text, accompanied by a firm demand: that the ECB intensify its oversight of crypto-assets to guarantee the financial security of citizens.

Guaranteed coexistence with cash

The potential of a dematerialized currency regularly raises questions about the future of cash. On this point, the European Parliament reassures and affirms its position categorically.

The adopted text strongly emphasizes the importance of maintaining the role of cash in the daily economy.

Parliament favors a complementary rather than substitution approach. It envisions the digital euro as an additional option for consumers, not as a replacement for banknotes.

This clarification aims to prevent any digital divide and to ensure that all users can access public money, regardless of their preferences or technological skills.

The ECB’s independence: a pillar of price stability

Discussions confirmed that the ECB must remain independent to maintain price stability. Deputies insist on protecting the bank from political influences and recall that this freedom obliges the institution to clearly explain itself to the citizens.

Rapporteur Johan Van Overtveldt illustrated this point by comparing financial stability to running water: You only realize its value when it is missing, he declares. He therefore warned that any external intervention risks causing inflation, a position welcomed by Christine Lagarde.

Timeline and outlook for the new digital currency

If the principle is supported, the concrete implementation of the digital euro follows a precise and cautious schedule, paced by several validation phases.

According to the ECB’s current projections:

• 2026 will be a pivotal year: this is when the European Commission should formulate a legislative proposal. The European Council and Parliament will then have to officially decide.
• If the lawmakers give the green light, a technical phase including tests and pilot projects is planned for 2027.
• Finally, if all conditions are met, actual circulation could begin as early as 2029, according to a gradual deployment process.

Towards a structural redefinition of monetary exchanges?

Although the ECB’s project appears technical, it marks a real turning point in the way monetary flows could be regulated in the future.

The orientation adopted by lawmakers and the central bank emphasizes a centralized architecture, fully controlled by the public institution, in contrast to the open and decentralized models that originally fueled the rise of private digital assets.

This approach is not a sudden break but a gradual evolution that will durably shape financial practices in Europe. By changing the foundations of the payment system, this transition could redefine the balance between the private sector and public money, imposing a new dynamic in economic exchanges within the euro area, including in relation to cryptocurrencies.