Digital Euro, ECON Approves: Launch by 2029 to Reduce the Dominance of Visa and Mastercard
On June 23, the Economic and Monetary Affairs Committee (ECON) of the European Parliament approved the legal framework for the digital euro, the digital payment tool issued by the ECB. The vote unlocks a long-stalled dossier and sets the target for a launch by 2029. The intent is to reduce Europe’s dependence on the payment networks Visa and Mastercard and to strengthen the monetary sovereignty of the bloc.
The issue that the digital euro aims to address has precise figures: according to ECB data, Visa and Mastercard account for 61% of card payments in the euro area and nearly all cross-border transactions. This imbalance is the political framework within which the measure is being addressed. "Strengthening the resilience of payments in Europe has become a geopolitical necessity," stated Markus Ferber, a prominent member of the ECON committee.
The vote comes at a time when major economies are moving in different directions. Just hours before the ECON approval, the U.S. Senate passed a four-year ban on U.S. CBDC, which is now under consideration by the House of Representatives: Trump has abandoned plans for a digital currency from the Federal Reserve and instead supports the development of privately denominated stablecoins in dollars. On the opposite front, China has already introduced the digital yuan, and Russia has announced that the digital ruble will become operational by September 2026. The approval also concludes three years of clashes between central banks and commercial banks over the dossier.
How it Will Work
The digital euro is conceived as a complement to cash and existing banking services, not as a replacement. Consumers will be able to hold digital euros in a dedicated wallet, subject to a holding limit yet to be determined. The ECB will provide the underlying infrastructure, while commercial banks and payment service providers will offer services to customers.
The system will support payments both online and offline, with a high degree of privacy: the ECB will not be able to directly identify users from payment data. The offline version will allow the exchange of digital euros directly from phone to phone without an internet connection, ensuring privacy similar to that of cash. On the cost front, financial institutions will be compensated for participation, while merchants will pay transaction fees lower than those of current card transactions.
Open Issues and Next Steps
The compensation structure for banks is one of the most controversial points in view of negotiations with member states. Commercial banks have pushed for strict holding limits to avoid a capital flight from traditional accounts in case of a crisis. The ECB welcomed the vote: "We welcome that the ECON committee of the European Parliament has agreed on its position on the package regarding the single currency, which will safeguard cash in euros as legal tender while shaping the digital euro."
Italian MEP Pasquale Tridico, who has negotiated the dossier for his group, described the vote as historic and "a great victory for citizens and small businesses." Operationally, a 12-month pilot phase is planned with a beta version to test the infrastructure in real-world scenarios with selected merchants and providers. The Parliament will formalize its position with a plenary vote in Strasbourg in early July; negotiations will follow with the 27 member states, aiming for a final agreement by the end of the year.