On June 23, 2026, the European Central Bank (ECB) secured parliamentary backing for the launch of a digital euro, aimed at reducing reliance on U.S. credit cards. The digital euro will function as an electronic wallet guaranteed by the central bank, enabling euro zone residents to make payments online and in person. The initiative has gained urgency following trade tensions with the U.S. under President Trump, who has imposed tariffs on EU goods.
The European Parliament's economic committee approved draft rules after extensive discussions with banks concerned about potential deposit outflows. The draft regulation states that the digital euro would provide a pan-European payment method and modernize the currency for daily transactions.
Siegbert Frank Droese, a member of the European Parliament, indicated that further voting may be necessary due to opposition from his political group. If there are no objections, negotiations with the European Council and the European Commission are expected to begin next month, with final approval aimed for the end of the year.
The ECB plans to conduct a 12-month pilot of the digital euro in the second half of 2027, with a full launch anticipated in 2029. Other countries, including China, India, and Brazil, are also exploring digital currencies. The draft regulation includes safeguards for banks, such as limits on how many digital euros users can hold and restrictions on businesses holding digital euros for more than 24 hours. The proposal reflects political compromises, maintaining a central role for commercial banks in distribution.
Discussions are ongoing regarding the costs associated with implementing the digital euro, estimated by the ECB to be between four billion and six billion euros over four years. Concerns have been raised about the potential obsolescence of the digital euro due to competing private sector initiatives.