The European Parliament has officially signaled support for renewed negotiations regarding the creation of a digital version of the euro. In a vote held on Thursday, 416 delegates supported the initiative, while 169 voted against it and 22 abstained. Lawmakers are now set to engage in discussions with member states later this month to further explore the concept.
Proponents describe the digital euro as a strategic opportunity for the European Union to reduce its dependence on US-based payment systems, such as Visa, Mastercard, Apple Pay, and Google Pay. Data from the European Central Bank (ECB) indicates that nearly two-thirds of card payments within the eurozone are currently processed by non-European companies. Furthermore, 13 out of 21 eurozone nations currently lack a national card scheme for daily online or in-store transactions.
Functionally, a digital euro would maintain the same value as physical cash and banknotes. To utilize the system, individuals would be required to open an account with a bank or a public entity, such as a post office, to facilitate money transfers or deposits. Payments could then be made via card, app, or phone. EU officials have emphasized that the system would incorporate high privacy standards, safeguarding user identities and offering an offline mode that provides confidentiality comparable to using physical cash.
Addressing concerns that the digital currency could be used as a tool for surveillance, EU lawmaker and lead negotiator Fernando Navarrete Rojas stated that the project would utilize the highest privacy standards and represents an alternative rather than a requirement. Alessandro Giovannini, an advisor to the digital euro director at the ECB, added that the digital euro is intended to provide consumers with more choices in an increasingly digital world, stressing that it would not replace existing payment methods or cash.
Despite the support, experts have highlighted the challenge of ensuring the digital euro does not function like a standard bank account, which could potentially drain deposits from European banks during financial crises. Officials noted that the digital euro could provide a necessary financial tool in difficult circumstances, citing the case of International Criminal Court judge Nicolas Guillou, who lost access to payment methods after being subjected to US sanctions. Ultimately, Giovannini described the initiative as a chance to end a long-standing dependence on foreign payment systems.
Moreover, some 13 out of 21 eurozone countries have no national card scheme for day-to-day payments in shops or online stores.
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