The digital euro, which functions as an electronic wallet backed by the central bank but distributed through banks or fintech firms, will enable all euro zone residents to make payments both online and in-person.
After six years of development, the ECB’s digital currency has gained urgency since Donald Trump returned to the White House, imposing tariffs on even long-standing trade partners like the European Union and sparking concerns that the U.S. might exploit its control over payment networks such as Visa and Mastercard.
The approval of draft regulations by the economic committee of the European Parliament follows three years of negotiations between the ECB and banks worried about potential deposit outflows and revenue losses, who sought to restrict the project’s reach.
”The introduction of the digital euro would… lessen the dependence on non-European providers by establishing a pan-European payment method and would modernize the single currency, allowing Union citizens to choose central bank money for their everyday transactions,” the draft regulation states.
Siegbert Frank Droese of the far-right Europe of Sovereign Nations, a political faction in the European Parliament, mentioned that his group opposed the proposal, suggesting that another vote may be necessary during the Parliament’s plenary session.
Unless there are objections, lawmakers are expected to begin discussions with EU governments and the European Commission next month, with the goal of achieving final approval by the year’s end.
The ECB intends to conduct a 12-month pilot of the digital euro starting in the latter half of next year, leading to a full rollout in 2029.
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