The European Parliament’s Economic and Monetary Affairs Committee approved plans for a digital euro, moving the EU a step closer to reducing its dependence on US payment systems.
European Central Bank (ECB) data shows that Visa and Mastercard account for 61% of card payments in the euro area and almost all cross-border card transactions, fueling concerns about Europe’s financial sovereignty.
The digital euro would be issued and backed by the ECB as a digital form of central bank money. It is designed to complement cash and existing banking services, not replace them. Consumers would use a dedicated digital wallet, while payments could be made both online and offline. The ECB says the system would offer a high level of privacy and would not allow the central bank to directly identify users through payment data.
The ECB would provide the infrastructure, while commercial banks and payment providers would offer digital euro services. Merchants are expected to pay lower transaction fees than those charged for current card payments, although negotiations continue over how participating financial institutions should be compensated.
Italian Member of the European Parliament Pasquale Tridico called the vote “historic,” saying it was “a major victory for citizens and small businesses.”
The European Parliament is expected to vote on the proposal in early July before negotiations begin with the EU’s 27 member states.
