The European Parliament on Thursday approved the opening of talks with the Council on creating a digital euro, a project aimed at reducing Europe’s reliance on US payment providers such as Mastercard and Visa.
The digital euro would be an electronic version of the single currency. It could be used for online purchases, in shops and for transfers between individuals.
It is intended as a European alternative to electronic payment systems that are largely operated by US companies. Employers could also use it to pay wages.
The European Central Bank (ECB) hopes to launch the digital euro in 2029, provided the necessary legislation is adopted by the end of this year.
Unlike traditional bank deposits, the digital euro would be Central Bank money, with its value guaranteed directly by the ECB in the same way as notes and coins.
Critics of the project, including the banking sector, have raised concerns about deposit outflows from commercial banks, implementation costs and risks to privacy protection.
Under the Parliament’s negotiating mandate, the digital euro would have to work both online and offline, a maximum holding limit would have to be set, and basic services would have to be free of charge.
The text was adopted by 416 votes to 169, with 22 abstentions.
The negotiating team, led by Spanish rapporteur Fernando Navarrete Rojas of the EPP, will soon meet the Irish Council presidency to begin discussions.
