Digital euro gains support as Europe seeks payment independence from the US
The European Central Bank secured key parliamentary backing on Tuesday for the launch of a digital euro, an electronic means of payments aimed at making the euro zone less reliant on US credit cards at a time of fraying transatlantic relationships.
The European Central Bank secured key parliamentary backing on Tuesday for the launch of a digital euro, an electronic means of payments aimed at making the euro zone less reliant on US credit cards at a time of fraying transatlantic relationships.
- A key European Parliament committee has backed legislation needed to launch the digital euro.
- The ECB says the digital euro would provide a Europe-wide digital payment option backed by the central bank.
- Support for the project has grown amid concerns that Europe relies too heavily on U.S.-based payment networks such as Visa and Mastercard.
- If approved by EU lawmakers and governments, the ECB plans to begin a pilot in 2027 before a possible full rollout in 2029.
The digital euro, essentially an electronic wallet guaranteed by the central bank but marketed by banks or fintech companies, will allow all euro zone residents to make payments online and in person.
Six years in the making, the ECB's digital cash has become a more pressing issue since Donald Trump returned to the White House, slapping tariffs on even established trade partners such as the European Union and raising fears that the US could one day weaponize its dominance over payment networks like Visa and Mastercard.
The approval of draft rules by the economic committee of the European Parliament comes after three years of wrangling between the ECB and banks, which have been concerned about deposit outflows and lost revenues and sought to limit the scope of the project.
"The introduction of the digital euro would... reduce overreliance on non-European providers by becoming a pan-European means of payment and would bring the single currency into the digital era by giving Union citizens the freedom to opt to pay with central bank money in their daily transactions," the draft regulation says.
Siegbert Frank Droese of the far-right Europe of Sovereign Nations, a political group in the European Parliament, said his group had voted against the proposal, raising the likelihood that a further vote would be needed at the Parliament's plenary.
Barring an objection there, lawmakers should start negotiating with EU governments and the European Commission next month, aiming for final approval by the end of the year.
The ECB plans to run a 12-month pilot of the digital euro starting in the second half of next year before a full launch in 2029.
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