The Digital Euro is expected by 2029: the goal is to strengthen European autonomy in payments against the dominance of the dollar.
The European Parliament's Committee on Economic and Monetary Affairs approved on Tuesday the long-awaited digital euro, as the EU seeks to reduce its dependence on US-controlled payment systems.
According to data from the European Central Bank (ECB), American payment giants Visa and Mastercard account for 61% of card transactions in the euro area and almost all cross-border card transactions.
The debate over Europe's financial sovereignty has intensified, amid escalating geopolitical tensions and concerns about the EU's dependence on foreign payments infrastructure.
The digital euro is one of the measures being promoted to strengthen Europe's strategic autonomy. It would be a digital form of central bank money, issued and guaranteed by the ECB, designed to complement cash and existing banking services, not replace them.
Under the proposal, consumers will be able to hold digital euros in a special wallet, with a maximum holding limit that has not yet been set.
The system will support both online and offline payments and aims to offer a high degree of privacy, as the ECB will not be able to directly identify users from their payment data.
The ECB will provide the underlying infrastructure, while commercial banks and payment service providers will offer the digital euro services to their customers. Financial institutions are expected to be compensated for their participation in the scheme, while merchants will pay fees that are estimated to be lower than those associated with current card transactions.
How this compensation should be shaped remains one of the most contentious issues ahead of negotiations with EU member states, according to three sources with knowledge of the discussions.
“We welcome the fact that the European Parliament’s ECON Committee has reached its position on the single currency package, which will secure euro cash as legal tender, while at the same time shaping the digital euro,” the ECB said in a statement.
“The approval of the digital euro regulation is a big victory for citizens and small businesses,” said Italian MEP Pasquale Trindico, who negotiated the file on behalf of the Left group, describing the vote as “historic.”
The European Union is not alone in developing a public digital currency. China has already introduced the digital yuan, while Russia has announced that its digital ruble will go live in September 2026.
The United States has taken a different approach. President Donald Trump has abandoned plans for a central bank digital currency issued by the Federal Reserve and instead supported the development of stablecoins, privately issued cryptocurrencies designed to maintain a stable value.
Because the vast majority of global stablecoins are denominated in U.S. dollars, proponents believe that this technology could strengthen the dollar's international role and expand its use in cross-border payments.
However, some policymakers and former officials believe that a US central bank digital currency may eventually be back on the agenda.
Timothy Massad, former chairman of the Commodity Futures Trading Commission (CFTC), told CoinDesk in May that discussions are ongoing in Washington and hinted that a digital dollar may ultimately prove inevitable.
The European Parliament is expected to ratify the committee's position during its plenary session in Strasbourg in early July.
Negotiations with the 27 EU member states will follow, with lawmakers aiming for a final agreement before the end of the year.
Although the press releases will range from very select to rare, I said I'd pass...because sometimes the editors hide.
