According to the European Central Bank (ECB), the American payment giants Visa and Mastercard account for 61% of bank card transactions in the eurozone and nearly all cross-border card transactions.
The digital euro will strengthen Europe’s autonomy
The digital euro is one of the measures designed to strengthen Europe’s strategic autonomy. It is intended to be a digital form of central bank money, issued and backed by the ECB, designed to complement cash and existing banking services rather than replace them.
Under the proposal, citizens will be able to hold digital euros in a special wallet; however, there will be a limit on the amount, which has yet to be determined.
High Level of Privacy
The system is designed to support both online and offline payments and ensure a high level of privacy.
The ECB will be responsible for creating the underlying infrastructure, while commercial banks and payment companies will provide services related to the digital euro.
Financial institutions are expected to receive compensation for participating in the system, while merchants will pay fees lower than current rates for bank card transactions.
The question of how this remuneration will be structured remains one of the most contentious issues ahead of negotiations with EU member states.
“We welcome the fact that the European Parliament has agreed on its position regarding the package in support of the single currency, which will preserve the euro in cash as legal tender while simultaneously establishing a framework for the digital euro,” Euronews quotes the ECB as saying .
The European Union is not the only one developing a public digital currency. China has already launched the digital yuan, and Russia has announced that the digital ruble will begin operating in September 2026.
The U.S. has taken a different approach
President Donald Trump abandoned plans to create a central bank digital currency and instead supported the development of stablecoins—cryptoassets issued by the private sector and designed to maintain a stable value.
Since the vast majority of the world’s stablecoins are denominated in dollars, their supporters believe this technology could strengthen the U.S. currency’s international role and expand its use in cross-border payments.
Nevertheless, some politicians and former officials believe that the idea of a U.S. central bank digital currency may eventually return to the agenda.
The European Parliament is expected to formalize the committee’s position during a plenary vote in Strasbourg in early July.
After that, negotiations with the 27 EU member states will begin. Members of Parliament hope to reach a final agreement by the end of the year. The digital currency is expected to be launched by 2029.
