Europe Just Voted to Build Its Own Digital Currency. And They Are Coming For Visa and Mastercard

Quick Answer: The European Parliament voted on 10 February 2026 to endorse both online and offline versions of the digital euro, clearing a major political hurdle. If legislation passes in 2026, the ECB aims to launch the currency by 2029. The move is designed to reduce Europe’s reliance on Visa, Mastercard and other US-controlled payment infrastructure, which currently processes the vast majority of European card transactions.

The European Parliament has given the digital euro its most significant political endorsement to date. On 10 February, lawmakers voted 443 in favour to back the European Central Bank’s proposal for a central bank digital currency that would function both online and offline — rejecting an earlier attempt by the lead parliamentary rapporteur to restrict it to offline use only.

The vote matters because the ECB cannot issue a digital euro without legislative approval. If the regulation passes through Parliament and the European Council in 2026, the ECB plans to begin testing in 2027 and aims for a first issuance by 2029.

But this is not a payments modernisation project. It is a sovereignty play.

The $24 Trillion Vulnerability

Every time a European consumer taps a card, pays online or transfers money abroad, the transaction overwhelmingly flows through infrastructure owned by American companies. Visa and Mastercard together process approximately $24 trillion in transactions annually. European card and mobile payments run almost entirely through non-European networks — a vulnerability that ECB President Christine Lagarde has described as urgent.

This dependence, explored in depth in EBM’s analysis of Europe’s $24 trillion breakup with Visa and Mastercard, has transformed from a technical inconvenience into a geopolitical risk. Sanctions regimes, trade disputes and US-China tensions have demonstrated how control over payments infrastructure can become a lever of economic power. Brussels no longer views this as a market issue. It views it as a security issue, on par with energy dependence and defence procurement.

What the Digital Euro Would Actually Do

Unlike cryptocurrencies or private stablecoins, the digital euro would be a direct liability of the ECB — state-backed digital cash, not a speculative asset. The framework endorsed by Parliament emphasises several design principles.

Offline functionality is central. The system would allow payments without internet access, replicating the resilience of physical cash during outages, cyber incidents or crises. This was a key area of political debate — the rapporteur Fernando Navarrete had argued for an offline-only version, but Parliament rejected this in favour of the ECB’s full dual-mode proposal.

The currency would be non-interest-bearing and subject to holding caps, designed to prevent deposit flight from commercial banks during times of stress. Privacy protections, particularly for small offline transactions, are intended to replicate the anonymity of cash — a deliberate contrast with surveillance-heavy CBDC models being developed elsewhere.

By providing a public, neutral settlement layer, the ECB hopes to reduce merchant fees, lower barriers for European payment providers and preserve access to state-backed money in a digital economy increasingly dominated by private platforms.

The Fintech Dimension

The digital euro does not exist in isolation. It sits alongside a broader European push to reclaim control over payment rails. The European Payments Initiative — backed by 16 major banks — has already launched Wero, a pan-European digital wallet covering 130 million users across 13 countries. Meanwhile, European fintechs are building alternative payment infrastructure that bypasses card networks entirely through instant bank-to-bank transfers.

In parallel, a consortium of 11 European banks is developing a euro-backed stablecoin designed to compete with dollar-denominated stablecoins that currently dominate the crypto payments market. S&P Global Ratings estimates the euro stablecoin market could grow from €650 million to €1.1 billion by 2030.

These initiatives — digital euro, Wero, euro stablecoin — represent a coordinated, if not always perfectly aligned, effort to ensure that when money becomes software, Europe retains control of the code.

The Resistance

The path to 2029 is far from clear. German banking lobbies resisted the project for more than two years, delaying progress far beyond the ECB’s original timeline. Commercial banks worry that a digital euro could cannibalise deposits, undermining a funding model that underpins Europe’s broader financial system.

Some lawmakers remain sceptical. German MEP Markus Ferber has argued that the digital euro risks becoming a political prestige project rather than a response to genuine consumer demand. The far right opposes it, and support within centrist parties remains divided. Building a legislative majority will require continued compromise on privacy, bank protections and the scope of the currency’s use.

There is also competitive pressure from the private sector. Stablecoins — particularly dollar-pegged tokens like USDC and USDT — are gaining traction faster than CBDCs globally. As one Citi executive recently noted, stablecoins have effectively overtaken the CBDC narrative in markets where regulatory clarity exists.

Strategic Infrastructure, Not Consumer Convenience

For consumers, the early impact of a digital euro may be modest. Cards, cash and mobile wallets will continue to dominate everyday payments. But for policymakers, the digital euro represents something more fundamental: the assertion that Europe’s financial infrastructure should not be controlled from outside its borders.

It is increasingly clear that payments have become geopolitical infrastructure. The digital euro is Europe’s answer to a world in which financial networks are no longer neutral utilities but instruments of power. Whether it arrives on time, on budget and with sufficient public trust remains an open question. But the direction of travel — toward a European payments system that is less dependent on Washington, less vulnerable to disruption and more aligned with the continent’s strategic interests — is now politically irreversible.

The 2029 target is ambitious. The politics are messy. But the vote on 10 February made one thing clear: Europe has decided it can no longer afford to rent its financial plumbing from someone else.

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