The European Union has taken a major political step toward launching a digital euro as concerns grow over the dominance of dollar backed stablecoins in global crypto payments. Lawmakers in the European Parliament have formally approved a negotiating mandate that allows talks to proceed with EU governments and the European Commission, signaling broad institutional alignment behind the project.
The vote cleared a significant procedural hurdle, with a strong majority of parliamentarians backing the proposal. This decision effectively endorses earlier agreements reached by EU finance ministers and brings the digital euro closer to becoming a reality. For EU policymakers, the move reflects rising unease about how heavily crypto based payments rely on private stablecoins linked to the US dollar.
Under the current framework, the digital euro would be issued by the European Central Bank as a central bank digital currency with full legal tender status, equivalent to physical cash. One of the defining features of the proposal is its dual usability both online and offline. Offline payments would allow users to transact without an internet connection, using tools such as near field communication or secure hardware devices. Supporters argue this capability is critical for payment resilience, privacy, and inclusion, especially during network disruptions or in low connectivity environments.
Advocates within the European Parliament have stressed that the digital euro is not designed to replace cash but to complement it. The emphasis on offline use reflects an effort to preserve cash like characteristics while adapting to a digital economy. Lawmakers backing the project have framed it as a public alternative to private payment systems rather than a direct competitor to cryptocurrencies.
The policy push comes as dollar denominated stablecoins continue to dominate crypto markets. Industry data shows that more than ninety percent of global stablecoin activity is tied to the US dollar, with tokens such as USDT and USDC forming the backbone of exchange trading, on chain settlement, and cross border crypto payments. In contrast, euro linked stablecoins remain marginal, with limited adoption and a comparatively small market value.
EU officials have increasingly described this imbalance as a strategic risk. Reliance on foreign currency stablecoins raises questions about monetary sovereignty, financial stability, and the long term role of public money in digital payments. The digital euro is being positioned as a way to ensure that central bank issued money remains relevant as payment habits evolve and crypto usage expands.
Despite the political momentum, the road to launch remains long. The ECB is still expected to decide whether the project will move into its next development phase, following an extended investigation period focused on technical feasibility and safeguards. Even under optimistic timelines, a public rollout would likely not occur until close to the end of the decade.
For now, the parliamentary vote represents intent rather than execution. As dollar backed stablecoins continue to entrench themselves as the default settlement layer in crypto markets, the digital euro is increasingly framed as Europe’s answer to a payments ecosystem that has already globalized around the US dollar.
