Digital euro gains major momentum as EU lawmakers back legal framework

The European Central Bank's push for a digital euro advanced on Tuesday after the European Parliament's ECON committee approved the draft legal framework and agreed to immediately open final trilogue talks with EU member states. The move caps roughly three years of negotiations, including concerns from commercial banks about potential deposit outflows. EU officials say a central objective is to safeguard Europe's monetary autonomy in the face of U.S. dollar-pegged stablecoins such as USDT and USDC. ECB President Christine Lagarde reiterated that physical cash will remain available. Current plans target both online and offline versions by 2029, with the offline option designed to enable private phone-to-phone transfers without an internet connection. A 12-month pilot phase will now begin to test the system with merchants and service providers. The decision comes shortly after the U.S. Senate voted in favor of a four-year ban on a CBDC.