The European Union is moving closer to launching a digital euro as policymakers seek to reduce the bloc’s dependence on US-based payment providers such as Visa, Mastercard, Apple Pay and Google Pay.
EU lawmakers were set to vote on Tuesday on legislation underpinning the proposed digital currency, a key step before the project can move forward. The European Central Bank (ECB) first proposed the digital euro in 2020, with the European Commission later formalising the initiative.
The digital euro would function as a separate virtual wallet backed by the ECB rather than funds held in a traditional bank account. Users would be able to make payments in shops, online or between individuals through cards, apps or mobile phones while maintaining the same value as physical cash.
Brussels views the project as a strategic effort to strengthen Europe’s financial independence. According to ECB data, nearly two-thirds of card payments across the euro area are processed by non-European firms, mainly Visa and Mastercard, while 13 of the 21 eurozone countries lack their own domestic card payment schemes.
Centrist EU lawmaker Gilles Boyer described payment systems as “instruments of power”, arguing that Europe needs a sovereign payment solution as concerns over dependence on US financial infrastructure grow.
The ECB is targeting a pilot programme by mid-2027, with a potential public rollout in 2029 if legislation is approved by EU member states and the European Parliament.
However, the proposal has faced resistance from banks, which warn that adapting systems for the digital euro could cost billions of euros and potentially divert deposits away from traditional lenders. The ECB has dismissed concerns over financial stability, saying safeguards are being built into the system to prevent large-scale deposit outflows.
