The European Parliament’s Economic and Monetary Affairs Committee has approved the digital euro, a central bank-backed digital currency designed to reduce Europe’s dependence on US-controlled payment networks ahead of a projected 2029 launch.
According to European Central Bank (ECB) data, Visa and Mastercard together account for 61% of card payments across the euro area, with the two US giants handling almost all cross-border card transactions in the bloc.
The committee’s endorsement of the digital euro forms part of a broader effort to shift the balance of European payments sovereignty, stated EuroNews.
The proposed currency would take the form of central bank money, issued and guaranteed by the ECB, intended to sit alongside physical cash and existing banking services rather than supplant them. Consumers would be able to store digital euros in a dedicated wallet, with a holding cap still to be confirmed. The system would function for both online and in-person transactions and is designed with user privacy as a central principle, meaning the ECB would not be able to link payment data to individual identities.
The infrastructure would be managed by the ECB, while commercial banks and payment service providers would be responsible for delivering services directly to customers. Financial institutions are set to receive compensation for taking part, and merchants would be subject to fees expected to sit below those currently charged by card networks. How that compensation model should be structured remains among the most disputed questions ahead of negotiations with EU member states.
The European Parliament is expected to confirm the committee’s stance in a full plenary vote in Strasbourg in early July.
The digital euro enters a field already contested by other major economies. China has rolled out its digital yuan, and Russia has stated that its digital rouble will go live in September 2026. The United States has moved in the opposite direction, with President Donald Trump stepping back from plans for a Federal Reserve-issued digital currency and instead throwing his support behind stablecoins. Because stablecoins are overwhelmingly denominated in US dollars, proponents of the approach contend it could extend the dollar’s reach across international payments.
ECB said, “We welcome that the European Parliament’s ECON Committee has agreed on its position on the single currency package, which will safeguard euro cash as legal tender while also shaping the digital euro.”
Italian MEP Pasquale Tridico, who led negotiations on behalf of The Left group, said, “The approval of the regulation on the digital euro is a major victory for citizens and small businesses,” describing the vote as “historic”.
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