Digital Euro Clears Key EU Hurdle as Lawmakers Back Framework

Most merchants would need to accept the digital euro. Small businesses and self-employed operators can claim exemptions if they do not already accept digital payments.

The legislation opens distribution to banks, payment providers, electronic money institutions and regulated crypto firms. Post offices can also distribute across the eurozone. Basic services such as account access and payments are free. Service providers can charge regulated fees for additional features. Offline payments are free.

Before any launch, the ECB must complete technical standards and testing before coordinating with payment providers. The proposal mandates a rollout period of at least two years after final legislative approval.

ECB Executive Board member Piero Cipollone told European lawmakers earlier this year that technical standards are expected in 2026, with pilot testing from 2027. The ECB wants to be technically prepared for a possible 2029 launch if the legal framework is approved. The central bank began studying a digital euro in 2020, aiming to preserve access to central bank money in a digital payments environment.

Private-sector projects continue under the European Union’s Markets in Crypto-Assets framework. In May, banking consortium Qivalis expanded to 37 member institutions across Europe and said it plans to launch a regulated euro-denominated stablecoin in the second half of 2026.

ECB Executive Board member Isabel Schnabel warned this month that stablecoins, with a market capitalization approaching $300 billion, could create financial stability risks and strengthen the U.S. dollar’s position because most are dollar-denominated.