On February 10, 2026, the European Parliament voted 420 to 158 in favour of advancing the digital euro project. In a crucial decision, MEPs rejected an earlier proposal that would have restricted the digital euro to offline use only, instead approving a version that will work both online and offline — usable in shops, for online purchases, and for person-to-person transfers, all free of charge.
What Is the Digital Euro?
The digital euro is a central bank digital currency (CBDC) that would be issued by the European Central Bank (ECB). Unlike cryptocurrencies, which are decentralised and volatile, the digital euro would be a stable, government-backed digital form of the euro, equivalent in value to a physical euro coin or banknote.
Key characteristics of the proposed digital euro:
- Free to use: No transaction fees for consumers on basic payments
- Works offline: Can be used without an internet connection, like physical cash
- Works online: Usable for e-commerce, subscriptions, and digital payments
- Person-to-person: Direct transfers between individuals without intermediaries
- Privacy-focused: The ECB states it would not have access to personal transaction data
- Not replacing cash: Designed to complement, not substitute physical currency
Christine Lagarde addressed privacy concerns directly, stating the ECB "would not have access to personal data" and emphasising that the digital euro is "in no way intended to replace cash," declaring: "Cash is queen."
Why This Vote Matters for Digital Sovereignty
The digital euro is arguably one of the most consequential European sovereignty projects currently underway. To understand why, consider who currently controls Europe's digital payment infrastructure:
| Payment Layer | Current Dominant Players | Headquarters |
|---|---|---|
| Card Networks | Visa, Mastercard | United States |
| Online Payments | PayPal, Apple Pay, Google Pay | United States |
| Stablecoins | USDT (Tether), USDC (Circle) | United States |
| Mobile Wallets | Apple Wallet, Google Wallet | United States |
At virtually every layer of the digital payment stack, European consumers and businesses are dependent on US-controlled infrastructure. The digital euro would create a sovereign alternative at the foundational level — a European payment rail that doesn't depend on any foreign company or government.
The Threat from US Stablecoins
One factor that appears to have accelerated the digital euro's progress is the rapid growth of US-originated stablecoins. Dollar-denominated stablecoins like USDT and USDC are increasingly used for international transactions, potentially undermining the euro's role in digital commerce.
Several MEPs who spoke during the debate explicitly referenced the risk of US stablecoins displacing the euro in digital transactions. The concern is that if Europe doesn't offer its own digital currency solution, the gap will be filled by private, US-regulated alternatives that operate outside European control.
How the Digital Euro Would Work
For Consumers
European citizens would be able to hold digital euros in a wallet provided by their bank or through a dedicated ECB app. Payments could be made by scanning a QR code, tapping a phone, or transferring directly to another person — similar to how mobile payment apps work today, but backed by the central bank rather than a private company.
For Merchants
Shops and online retailers would accept digital euro payments through their existing payment terminals and e-commerce systems. Crucially, transaction fees for merchants would be capped, potentially offering significant savings compared to current card network fees that typically range from 0.5% to 2%.
For Businesses
The digital euro could simplify cross-border payments within the eurozone, reduce transaction costs, and provide an alternative to US-dominated payment networks. For businesses concerned about digital sovereignty, it offers a payment method that operates entirely within European jurisdiction.
Privacy: The Biggest Question
The digital euro's most contentious aspect has been privacy. Critics worry that a central bank digital currency could enable government surveillance of financial transactions. The Parliament's vote addresses this concern in several ways:
- Offline transactions: Payments made offline would have cash-like privacy — neither the ECB nor any other institution would have visibility into these transactions
- Online transactions: Would have privacy protections similar to current bank transfers, with data accessible only under the same legal frameworks that govern existing financial transactions
- No ECB data access: The ECB has committed to not collecting or storing personal transaction data
- Bank-mediated: Commercial banks would act as intermediaries, applying existing data protection rules
While the digital euro is still in development, European payment alternatives exist today. Check our payment processing directory for European providers like Mollie and Adyen that keep your payment infrastructure European.
What Happens Next?
Despite the strong parliamentary support, the digital euro still has a long road ahead before it reaches European wallets:
- Legislative process: The regulation still needs to be finalised through negotiations between the Parliament, Council, and Commission (trilogue)
- ECB preparation phase: The ECB is already in a "preparation phase" for the digital euro, developing technical infrastructure and testing prototypes
- Pilot programmes: Limited pilot rollouts are expected before any full launch
- Full launch: If all goes to plan, the digital euro could be available to eurozone citizens by 2028-2029
The Sovereignty Dimension
The digital euro vote comes at a time when Europe is accelerating its push for digital sovereignty across multiple fronts. In the same week, Deutsche Telekom opened Europe's first sovereign AI factory in Munich, and France announced a ban on US video conferencing tools for its civil servants.
Together, these developments paint a picture of a continent that is systematically building its own digital stack:
- Infrastructure: Sovereign AI compute and European cloud providers
- Software: European alternatives to US collaboration tools
- Payments: The digital euro as a sovereign payment rail
- Regulation: The AI Act, Digital Markets Act, and Data Act creating a European-controlled framework
Whether you view these developments as protectionism or prudent self-reliance, the direction is unmistakable. Europe is moving from rhetoric to action on digital sovereignty, and the digital euro may be the most far-reaching initiative of them all.
"The digital euro is not about replacing cash or competing with private banks. It is about ensuring that Europe has a sovereign, reliable, and privacy-respecting digital payment option that is not dependent on the decisions of foreign companies or governments." — European Parliament rapporteur
