One of the European Central Bank’s most complex and controversial projects is heading for a crucial test in the first half of 2026, when the European Parliament is expected to vote on the digital euro.
The plan cleared a key hurdle in late December, when the European Council backed the ECB’s plan to launch an electronic equivalent to cash: a digital currency that works in stores, online and in peer-to-peer transactions.
Member states have supported the proposal, which would give European central bankers greater agency over electronic retail payments, which at present rely heavily on US companies. But it is unclear if the project will win the support of the majority of the 720 MEPs. An official watching the debate closely said the vote “could really go down to the wire”.
In an effort to win over sceptics, the ECB, which began evaluating digital central bank money in 2020, has started a public relations blitz.
READ MORE
Piero Cipollone, the ECB executive board member in charge of the project, argued for the digital euro in 21 speeches, six interviews and two blog posts in 2025. ECB president Christine Lagarde vowed in December to “push as hard and as fast as we can to get [the digital euro] out”.
The ECB aims to issue the first digital euros in 2029, following a pilot in 2027. Current rules only allow it to circulate physical cash, meaning lawmakers must first agree new legislation.
The central bank’s main argument for the digital euro is freedom and sovereignty. In a digital age where cashless payments are becoming more prevalent, large parts of Europe’s card and online payments are controlled by US companies such as Visa, Mastercard and PayPal.
Centre-left groups and liberals in the European Parliament back the plan but are more than 40 votes short of an absolute majority. The far right opposes it outright.
The decisive votes are likely to come from the centre-right European People’s party and the European Conservatives and Reformists, where views are split.
“Building a majority will prove difficult,” German EPP MEP Markus Ferber, who is sceptical about the ECB’s plans, told the Financial Times, adding that “positions differ widely”.
Fernando Navarrete, an EPP MEP from Spain who was appointed by parliament to assess the digital euro, has argued for a scaled-down version. He has suggested initially limiting it to offline use for payments from one person to the other.
Mr Ferber backed that view, arguing that offline payments are the only ones where existing private sector solutions had “genuine gaps” – such as the availability of digital payments when there is no power or internet.
“A digital euro only makes sense if it offers clear and comprehensible added value for citizens and businesses,” said Mr Ferber, adding that “it must not become a political prestige project”.
He warned that “it is by no means a given that there is clear demand” for an ECB-backed scheme for online payments.
At the same time, the continent’s large banks are investing millions in a European challenger to US payment schemes, and fear that a digital euro could derail their fledgling private sector solutions. Bankers warn it will come with huge costs, tremendous complexity and a high risk of failure.
“The ECB has no clue of what it means to launch a payment scheme for more than 350 million people,” the head of retail of a large European lender told the FT on the condition of anonymity.
In a study commissioned by banking lobby groups, Big Four accounting firm PwC last summer estimated that the project’s total costs for euro zone banks could hit €18 billion. The ECB argues the figure would probably be closer to €6 billion.
Far right politicians oppose the project for different reasons. Germany’s Alternative for Germany (AfD) party has warned it could lead to “the gradual displacement of cash”, which it says is the only payment method that guarantees anonymity.
Luděk Niedermayer, a Czech MEP and EPP member, said the digital euro was “strategically, economically, and politically important” and that his priority was introducing it “as soon as possible” after the “necessary technological testing and potential pilot phases”.
Mr Niedermayer said he was satisfied that “sufficient safeguards for those concerned about the role of coins and banknotes” were in place. Support within the EPP could “diverge significantly” in a plenary vote, he acknowledged, but stressed it was too early to speculate about the overall outcome.
In a post on Instagram, the far right Patriots for Europe in the European Parliament claimed that the ECB could use the digital euro to stop citizens from purchasing certain goods or services, stating that it could be used as a tool for “censorship”. The group added: “If you want to buy something that ‘they’ think that you should not, they will not allow you to do so.”
The ECB is adamant that it would neither be able to monitor nor control individual payments.
Ms Lagarde said in December that the global dominance of US payment providers gave US President Donald Trump leverage. She pointed to International Criminal Court judges who were sanctioned by the US.
“People can be barred from access to any financing because of a decision made on the other side of the pond,” she said. “We are not effectively sovereign in our own garden.”
Many observers, including some within the ECB, fear that the US government’s strong support for dollar-denominated stablecoins could increase Europe’s dependency on the United States if such digital tokens became more widespread.
Positive Money Europe, a pro-consumer lobby group, is calling for a “truly public form of European money” in a digital world that is otherwise “dominated by US financial interests”. – Copyright The Financial Times Limited 2026
