European Parliament Committee Approves Draft Digital Euro Legislation

FRANKFURT (CNA) — The European Central Bank’s (ECB) digital euro project has reached a significant legislative milestone. The proposed electronic payment tool is designed to reduce the Eurozone’s dependence on U.S. credit card networks, particularly amidst intensifying transatlantic economic tensions.

According to Reuters, the digital euro acts as a central bank-backed digital wallet serviced by commercial banks or fintech firms, enabling residents across the Eurozone to conduct payments both online and in person.

Following six years of groundwork, the initiative has gained urgency with the return of Donald Trump to the White House. Concerns have mounted that U.S. tariff policies and potential dominance in payment networks like Visa and Mastercard could be leveraged as instruments of geopolitical pressure.

The European Parliament’s Economic and Monetary Affairs Committee approved the draft regulation, representing a critical breakthrough after three years of negotiations with the banking sector. Banks have remained cautious, seeking to limit the project's scope to mitigate risks of deposit flight and revenue loss.

The draft states: "The introduction of a digital euro will reduce over-reliance on non-European providers by establishing a pan-European payment instrument; it also brings the single currency into the digital age, granting EU citizens the freedom to use central bank money in daily transactions."

Despite the approval, the path ahead remains complex. Members of the "Europe of Sovereign Nations" group have opposed the motion, signaling potential further debate during the European Parliament's plenary session. If no objections are raised, negotiations with EU governments and the European Commission are expected to commence next month, with a goal for final approval by the end of this year.

The ECB plans to launch a 12-month pilot program in the second half of next year, with a full-scale rollout targeted for 2029.