Digital euro wins key EU backing as lawmakers approve draft rules

The European Union has moved a step closer to creating a digital euro, after members of the European Parliament passed a crucial vote on the virtual currency.

Issued on: 24/06/2026 - 22:11

3 min Reading time

The European Central Bank (ECB) secured key parliamentary backing on Tuesday for the launch of the digital euro – an electronic currency aimed at making the eurozone less reliant on American-owned payment systems such as Visa, Mastercard, Apple Pay and Google Pay.

The approval of draft rules by the economic committee of the European Parliament comes after three years of wrangling between the ECB and European banks, which had voiced concerns about deposit outflows and lost revenues and sought to limit the scope of the project.

Brussels hopes the digital euro will provide a local alternative for payments in shops or online, allowing people to pay using a card, an app or their banking app in a way that feels familiar.

The ECB first suggested the digital euro in 2020, before the European Commission – the EU's executive branch – made its formal proposal. However, the digital euro cannot be created unless the rules underpinning the project are approved by EU capitals and the European Parliament.

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Virtual wallet

When people use a bank card, Apple Pay or Google Pay, they pay with physical money that exists in their account. In contrast, digital euros would sit in a separate virtual wallet.

Digital euros would have the same value as cash and banknotes. Users will need to create an account with a bank, or a public institution such as a post office, then transfer money into this from another account or through a cash deposit.

Users will be able to pay with digital euros in shops, online and between individuals, using different methods including a card, app or phone.

The ECB hopes the digital euro will be available to EU citizens by 2029, if EU negotiators approve the rules by the end of this year. It says it is ready to launch a pilot programme in mid-2027, to test how the system would work in practice.

"Banks and merchants need time to prepare so they can roll it out smoothly and at scale”, said Alessandro Giovannini, adviser to the digital euro director at the ECB.

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'Wake-up calls'

Officials stress that the system would protect people’s privacy, with no possibility to identify who made transactions, and an offline mode that would be as confidential as using cash.

“It wouldn't replace anything,” said Giovannini. “Cash would still be available, and people could use existing private payment methods.”

He added that the digital euro would give people more choice and allow consumers to “preserve their freedom to choose how to pay, as daily life becomes more digital”.

Supporters say the digital currency is key to Europe’s ability to control its financial infrastructure. Payment systems are “not neutral” but rather “instruments of power”, centrist EU lawmaker Gilles Boyer said in a statement.

“We, Europeans, have had many wake-up calls about our dependence on the US. We're fully awake now," he added.

EU officials often point to Washington’s 2025 sanctions against International Criminal Court judges to illustrate the grip of US firms, with French judge Nicolas Guillou having described how he lost access to his Visa card.

The ECB says nearly two-thirds of card payments in the eurozone are handled by non-European companies, mostly Visa and Mastercard.

It also says 13 out of 21 eurozone countries have no national card scheme for payments in shops or online stores.

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Banking sector fears

Lawmakers proposed in the draft regulation that the European Commission decide how many digital euros every user could own, based on an ECB recommendation, and review that ceiling at least every two years.

Businesses would not be allowed to hold digital euros for longer than 24 hours. The digital euro would also not earn any interest or cost anything to its users.

Banks have been among the most vocal critics in the debate, mainly because of the expected cost and the possible impact on deposits.

Adapting the banking system will cost €18 billion, a report in April by the European Banking Federation said. The ECB, however, insists the cost for the banking sector will be between €4 billion and €6 billion in investment costs.

Banks also fear the effect on their financial stability, because deposits could fall if customers convert money into digital euros. The ECB says there is no risk of this.

“Thanks to its design that prevents large deposit outflows, the digital euro wouldn't cause these risks – even in extreme and unlikely crisis situations,” Giovannini said.

European banks are equally wary of reduced demand for their online services and worry that the digital euro could become a rival to Wero, the pan-European payment system.

(with newswires)