Crypto news

The European Parliament's Committee on Economic and Monetary Affairs has officially approved the digital euro bill. The voting results are telling: 43 MEPs supported the document, 14 opposed it, and one abstained. This is a significant step forward for a project that the ECB has been nurturing for several years.

The digital euro is positioned as an electronic form of fiat currency issued directly by the European Central Bank. The key innovation is a hybrid architecture: the asset will be able to operate both online (via a traditional account) and offline (via a local storage on the user's device). The offline mode is proposed to be treated like cash: if you lose your smartphone or card with such a wallet, the funds are not recoverable. This is a strict but logical rule to ensure the anonymity of small transactions.

Technology and Distribution

For transaction verification, developers are betting on zero-knowledge proofs. This will allow confirming operations without disclosing personal data — a critically important function for offline payments. Distribution of the digital euro will be handled not only by banks but also by payment providers, post offices, electronic money issuers, and even regulated crypto-asset providers. The last point is particularly interesting: it is a direct signal to the market that European crypto companies may gain access to a state-issued digital currency.

Most companies will be required to accept the digital euro. Exceptions are made only for micro and small enterprises that do not support other digital payments. Basic services for users — account opening, storage, fund management, and access to at least one payment instrument — will remain free. To mitigate risks to the banking system, a storage limit per citizen will be introduced. The specific amount has not yet been announced: it will be determined by the European Commission based on ECB recommendations, with a review at least once every two years.

Timeline and Pitfalls

According to ECB estimates, if legislation is adopted in 2026, pilot transactions could start in mid-2027, with the first full-scale issuance no earlier than 2029. Before launch, the regulator must build the infrastructure, conduct real-world pilot tests, and clarify liability rules. Special attention is given to offline risks, including the problem of double spending. After authorization, a deployment period of at least 24 months is envisaged.

The digital euro is intended to reduce the EU's dependence on external payment infrastructures. According to ECB data from October 2025, nearly two-thirds of card transactions in the eurozone are processed by non-European companies. This is a strong argument in favor of a state-issued digital currency. However, European banks are simultaneously developing a private alternative: in May, ING reported that the number of participants in the regulated euro-stablecoin project Qivalis had grown to 37. The asset's launch is planned for the second half of 2026, subject to obtaining approvals.

The ECB has already warned about the risks of euro-stablecoins: they could reduce bank lending and complicate control over interest rates. This is a classic dilemma: the state wants to maintain a monopoly on money, but the private sector is already creating its own solutions.

My comment: The approval of the bill is an important but not final stage. The real battle will revolve around storage limits and offline functionality. If the ECB sets too low a ceiling (e.g., up to 500 euros), the digital euro risks becoming a niche tool for micropayments rather than a full-fledged alternative to cash. Furthermore, the parallel launch of private stablecoins creates a unique situation: for the first time in history, a single currency area may have several digital forms of money — state-issued and private. How they will coexist is a major question for the market and regulators.