Digital EUR it is expected to be released by 2029, as part of Europe's effort to strengthen its autonomy in payments and reduce its dependence on the US dollar.
The European Parliament's Committee on Economic and Monetary Affairs adopted on Tuesday (23/6) the long-awaited draft on the digital euro, as the European Union seeks to limit its dependence on payment systems controlled by US companies.
According to data from the European Central Bank, US paying giants Visa and Mastercard manage 61% of card payments in the euro area and almost all cross-border card transactions.
The debate on Europe's financial sovereignty has intensified due to increasing geopolitical tensions and concerns about the EU's dependence on foreign payment infrastructure.
What is digital euro
The digital euro is one of the measures promoted to strengthen Europe's strategic autonomy.
It will be a digital form of central bank money, which will be issued and supported by the ECB and will function complementary to cash and existing banking services, without replacing them.
According to the proposal, consumers will be able to keep digital euro in a special digital wallet, with a ceiling of possession not yet established.
The system will support both electronic and offline payments and offer a high level of privacy protection, as the ECB will not be able to identify users directly through their transaction data.
The ECB will provide the basic infrastructure, while commercial banks and payment service providers will provide the relevant services to their customers. Financial institutions are expected to be compensated for their participation in the system, while traders will pay commissions estimated to be lower than those of current card transactions.
Just how this compensation model will be formulated remains one of the most controversial issues in the face of negotiations with EU Member States, according to three sources that are aware of the relevant discussions.
«We welcome the fact that the European Parliament's Committee on Economic and Monetary Affairs has agreed to its position on the single monetary policy package, which will secure cash in euro as legal money and at the same time shape the framework for the digital euro», the ECB reported in a communication.
What other countries have a digital currency?
The European Union is not the only one developing a public digital currency. China has already introduced digital wan, while Russia has announced that digital rubli will be launched in September 2026.
The United States is taking a different approach. Donald Trump abandoned plans for a central bank digital currency to be issued by the Federal Reserve and instead supported the development of stablecoins – privately issued crypto-currency coins designed to maintain stable value.
Since the vast majority of stablecoins are linked to the US dollar, their supporters argue that this technology can strengthen the international role of the dollar and widen its use in cross-border payments.
However, some politicians and former officials estimate that a digital dollar issued by the US central bank may come back to the fore in the future.
The European Parliament is expected to formally ratify the committee's position at the plenary session in Strasbourg at the beginning of July.
Negotiations with the 27 EU member states will then begin, with a view to reaching a final agreement before the end of the year.
With information from euronews.com
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