The European Parliament’s economic committee has backed plans for a digital euro aimed at reducing Europe’s dependence on US-controlled payment networks such as Visa and Mastercard.
The European Central Bank-backed currency is targeted for a possible launch in 2029. However, the proposal must first clear the full European Parliament and pass negotiations with the EU’s 27 member states.
Consumers would be able to keep digital euros in a dedicated wallet and use them for payments. The system would support both online and offline transactions.
A limit would apply to the amount each person could hold, although lawmakers have not yet decided the final ceiling.
The ECB would provide the underlying infrastructure, while commercial banks and payment service providers would offer digital euro services to customers.
The proposed system is designed to provide a high level of privacy. The ECB would not be able to identify users directly from their payment information.
Offline payments would work more like cash, while online transactions would pass through banks and other approved payment service providers.
Financial institutions are expected to receive compensation for participating in the digital euro system.
Merchants would pay transaction fees, although these are expected to be lower than the fees associated with existing card payments.
How banks and payment companies should be compensated remains one of the main unresolved issues ahead of negotiations with EU member states.
The European Parliament is expected to formalise the committee’s position during a plenary session in Strasbourg in early July.
Negotiations with the EU’s 27 member states would then begin.
Lawmakers aim to reach a final agreement before the end of 2026, while the ECB is targeting a possible launch of the digital euro in 2029.
Get the latest tech news, telecom insights, and product launches wherever you prefer.
Add ProPakistani to Preferred Sources and see more of our stories in Google Search and Top Stories.