TLDR
- The European Parliament’s economic committee approved draft rules for a digital euro on Tuesday
- The project aims to reduce the eurozone’s reliance on U.S. payment systems like Visa, Mastercard, Apple Pay, and Google Pay
- The ECB hopes the digital euro will be available to citizens by 2029, with a pilot program in mid-2027
- Banks oppose the project, citing costs estimated at up to 18 billion euros and fears over deposit outflows
- Nearly two-thirds of card payments in the eurozone are currently processed by non-European companies
The European Central Bank moved closer to launching a digital euro on Tuesday after the European Parliament’s economic committee approved draft rules for the project. The vote comes after three years of negotiations between the ECB and European banks.
European Union lawmakers cleared the way for talks on the legal framework that will underpin the digital euro, a project deemed vital to the bloc’s monetary independence. https://t.co/PWZHyXFsWH
— Bloomberg (@business) June 23, 2026
The digital euro is designed to reduce the eurozone’s dependence on U.S.-based payment platforms. Nearly two-thirds of card payments in the euro area are handled by non-European companies, mostly Visa and Mastercard.
The project was first proposed by the ECB in 2020. The EU’s formal legislative proposal followed later, and the rules must still be approved by EU member states and the full European Parliament before the currency can launch.
How the Digital Euro Would Work
The digital euro would not replace cash or existing bank accounts. Instead, users would hold digital euros in a separate virtual wallet, created through a bank or public institution like a post office.
Users could fund the wallet by transferring money from an existing account or depositing cash. Payments could then be made in shops, online, or between individuals using a card, app, or phone.
Officials say the system would protect privacy. Transactions would not be traceable, and an offline mode would function similarly to using physical cash.
“It wouldn’t replace anything. Cash would still be available, and people could use existing private payment methods,” said Alessandro Giovannini, advisor to the digital euro director at the ECB.
Why the EU Is Pushing Ahead
EU officials have pointed to growing concerns about dependence on U.S. technology. EU lawmaker Gilles Boyer described payment systems as “instruments of power,” citing Washington’s 2025 sanctions against International Criminal Court judges as an example of how U.S. financial infrastructure can be used as leverage.
A French ICC judge, Nicolas Guillou, described losing access to his Visa card following those sanctions.
Thirteen of 21 eurozone countries currently have no national card payment scheme for everyday purchases.
Banks Push Back
European banks have been the main source of opposition. The European Banking Federation estimates the cost of adapting to the digital euro at around 18 billion euros. The ECB puts that figure lower, at between four and 5.8 billion euros.
Banks also worry that customers moving money into digital euro wallets could reduce bank deposits. The ECB says the system’s design prevents large-scale outflows, even in crisis scenarios.
If EU negotiators approve the full rules by the end of 2026, the ECB plans to launch a pilot program in mid-2027. A full public rollout is targeted for 2029.
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