The European Parliament on Thursday signaled its support for renewed negotiations aimed at creating a digital euro, with 416 delegates voting in favor and 169 against. This initiative aims to provide an alternative payment method to current systems dominated by non-European companies. Lawmakers are set to meet with member states later this month to discuss the concept further.
Timeline for the Digital Euro's Development
The EU parliament and member nations hope to finalize a deal by the end of 2026. If successful, the European Central Bank (ECB) could launch the digital euro by 2029. This digital currency aims to reduce the bloc's reliance on US payment systems like Visa and Mastercard, which currently handle nearly two-thirds of card payments in the eurozone.
Currently, 13 out of 21 eurozone countries lack a national card scheme for everyday transactions, making the digital euro a potential solution to enhance payment options within the region.
Functionality and Privacy Features of the Digital Euro
A digital euro would maintain the same value as cash and banknotes. Users will need to create an account with a bank or public entity to transfer or deposit money. Payments can be made at stores, online, or between individuals through various methods, including cards, apps, or phones.
EU officials emphasize that the digital euro will prioritize user privacy, safeguarding the identities of its users. It will also feature an offline mode that offers confidentiality similar to cash transactions.
Implications for Traditional Cash and Payment Methods
Concerns have been raised about whether the digital euro could lead to a decline in cash usage across Europe. EU lawmaker Fernando Navarrete Rojas rejected claims that the digital euro could serve as a tool for control, affirming it would adhere to “the highest privacy standards.”
Experts caution that if the digital euro functions like a full cash bank account, it could drain deposits from European banks, particularly during crises such as bank runs. Nevertheless, Alessandro Giovannini, an advisor at the ECB, argues that the digital euro will enhance consumer choice without replacing existing payment methods.
- Digital euro aims to reduce reliance on US payment systems.
- Possible launch by 2029 following negotiations.
- Maintains cash value and offers multiple payment methods.
- Prioritizes user privacy and offline transactions.
🤖 This article was rewritten by Feed and Figures' editorial AI from a report originally published by DW English. Facts and quotes are preserved from the original; the rewrite focuses on clarity and structure. For the unedited original, see the source link below.
