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The new system aims to reduce Europe's dependence on Visa and Mastercard, by offering instant payments, without fees and even without the internet.
The European Parliament's Committee on Economic and Monetary Affairs has approved the digital euro project, an important step in the European Union's efforts to strengthen its financial independence and reduce dependence on American payment systems.
The new digital currency, which is expected to come into use by 2029, will be issued and guaranteed by the European Central Bank (ECB) and will operate in parallel with physical money, without aiming to replace it.
Currently, US giants Visa and Mastercard process around 61% of card payments in the eurozone and almost all cross-border card payments. For this reason, Brussels considers the digital euro a strategic project for Europe's economic sovereignty.
How will the digital euro work?
Citizens will be able to open a digital wallet through their banks or by depositing money at authorized institutions, such as post offices.
Payments will be made by mobile phone, bank card or other electronic device, just like current payments. The main difference is that the funds will be managed directly by the European Central Bank and not by commercial banks.
The system will allow payments in shops, online and between individuals, regardless of which country in the eurozone users are located.
Instant payments and no fees
One of the main advantages of the digital euro is speed. Unlike the current system, where merchants can wait hours or days to receive funds, payments with the digital euro will be made instantly.
Consumers will also not pay fees for using the system. Businesses, which currently pay commissions for transactions through Visa and Mastercard, will also benefit.
European officials argue that this will reduce payment costs and increase competition in the financial market.
It will work even without internet.
One feature that distinguishes the digital euro from most current systems is the ability to make payments even without an internet connection.
In the event of power outages or problems with communication networks, users will be able to continue to conduct transactions offline.
This idea gained more support after the massive power outage in Spain and Portugal during 2025, when card and phone payments were blocked for several hours.
According to the ECB's plan, the digital euro will offer a high level of privacy. The central bank will not be able to directly identify users through their payment data.
However, European authorities emphasize that the system will comply with rules against money laundering and the financing of illegal activities.
Global race for digital currencies
The European Union is not alone in developing a state-owned digital currency. China has already launched its digital yuan, while Russia has announced that its digital ruble will become operational in September 2026.
Meanwhile, the United States has chosen a different approach, supporting the development of stablecoins, private digital currencies primarily pegged to the US dollar.
The European Parliament is expected to officially vote on the project in its July plenary session, after which negotiations will begin with the 27 EU member states for the final approval of the legislation. / Pamphlet
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