European Parliament Backs Online and Offline Digital Euro

Members of the European Parliament voted in favor of an amendment that supports a dual‑format digital euro with both online and offline payment capabilities, rejecting a narrower legislative suggestion that would have limited the instrument to offline use only. That parliamentary outcome narrows political differences ahead of technical and legal negotiations in the Committee on Economic and Monetary Affairs and increases the likelihood that the ECB’s dual‑mode design will shape the detailed rulemaking. The dual‑format approach responds to competing priorities: connected transactions enable interoperability, real‑time monitoring and merchant integration, while offline device‑to‑device functionality preserves resilience and some privacy features. Implementing offline capability raises substantial technical requirements, including secure on‑device value storage, robust anti‑fraud and double‑spend protections, and reliable reconciliation protocols for later synchronization with central ledgers. The vote also dovetails with recent ECB commentary framing a retail CBDC as an instrument of strategic autonomy — a way to maintain a European payments rail that can be widely accepted by merchants and reduce reliance on non‑European platforms. Making the digital euro broadly acceptable at points of sale or legally designated as acceptable merchant tender would have immediate operational consequences for terminals, e‑commerce systems and merchant onboarding processes across the bloc. Financial intermediaries — banks, card networks and fintechs — are likely to see their operational roles and commercial incentives change, as public architecture choices could push them toward building or integrating with a unified retail payments layer. Politically, the Parliament’s decision represents a compromise between privacy‑focused, peer‑to‑peer payment advocates and authorities prioritizing anti‑money‑laundering safeguards and oversight. Committee negotiations will therefore center on calibrating privacy protections, AML controls, liability rules, merchant compliance, and cross‑border interoperability. For industry, the parliamentary signal reduces political uncertainty and makes investment in both connected and offline CBDC technologies more commercially relevant. While not a final mandate, the endorsement accelerates the timetable for technical specification work and raises the bar for regulatory oversight and infrastructure planning across the EU payments ecosystem.