The European Central Bank (ECB) this week pushed back against a European Parliament proposal that would limit the planned digital euro to offline use only, arguing instead for a hybrid model that combines both online and offline payments.
Speaking in Frankfurt, Alessandro Giovannini, adviser in the ECB’s directorate for the digital euro, said the central bank supports the European Commission’s version of the plan over an alternative put forward by EU lawmakers.
“We do believe that the Commission proposal makes sense, and the Commission proposal foresees both online and offline at the same time,” Giovannini told reporters.
His comments came in response to a report by lead lawmaker Fernando Navarrete, published last month, which suggested that an online version of the digital euro should only be introduced if the private sector fails to provide a unified payment solution for the bloc.
Otherwise, he argued, the currency should remain restricted to offline, person-to-person transactions.
Giovannini countered that such an approach would leave consumers unable to shop online or send money over distances. “The question is, would an offline solution solve the problem that we have? The answer, I think, is no,” he said.
He stressed that the ECB does not intend to compete with private players.
“We don’t want: ‘I act only if you fail,’” he said. He added that “We have designed the digital euro to be something that is really for strengthening the entire payment ecosystem.”
If the necessary legislation is approved by the end of next year, the ECB expects to begin pilot testing the digital euro in 2027, with the first issuance potentially taking place as early as 2029, according to presentation slides shared during the briefing.
Meanwhile, Cyprus is already preparing for the shift. The Central Bank of Cyprus (CBC) has held a series of meetings in Nicosia with local banks, payment service providers, and electronic money institutions to assess the implications of the forthcoming eurozone framework.
According to CBC governor Christodoulos Patsalides, “the adoption of the digital euro is becoming imperative as digital payments are increasing rapidly and the world is becoming more and more digital,” he said during a recent presentation.
He explained that the digital euro will complement, not replace cash, offering an additional legal-tender payment option across the euro area.
The CBC, which participates in the Eurosystem’s working groups on the project, said its goal is to ensure that Cyprus remains aligned with the broader European payment infrastructure while safeguarding consumer access and data privacy.
The bank also noted that the introduction of the digital euro could reduce the island’s reliance on non-European payment providers, strengthening the resilience and autonomy of its financial ecosystem.
Local financial institutions have been advised to prepare for integration with the upcoming ‘Digital Euro Rulebook’, which will define technical and operational standards across member states, as outlined in the ECB’s progress report.
If EU lawmakers give their final approval by 2026, Cyprus is expected to participate in the pilot phase planned for 2027, with a view to full implementation around 2029, the same timeline outlined by the ECB.
