EU lawmakers' committee backs the digital euro, advancing it toward a plenary vote

A key European Parliament committee has thrown its weight behind the digital euro, advancing the long-debated project a significant step closer to reality just as the United States moves to fence off a state-issued digital dollar. The vote in the Economic and Monetary Affairs Committee clears the way for a full parliamentary vote and the next phase of negotiations.

The committee was scheduled to vote on June 23 on the draft report shaping the legislation, as well as on whether to open formal three-way talks with the EU Council and the European Commission. With the parliament's backing now secured at committee level, the file moves toward a plenary vote expected in July, after which trilogue negotiations would seek to finalize the text. Lawmakers had spent months narrowing differences, reaching compromises on some of the most sensitive aspects of the design.

Among those compromises, negotiators agreed that the digital euro should function both online and offline, though offline payments would at least initially be confined to local transactions between individuals or at a payment terminal. On fees, the framework envisages that merchants would pay no more than they do under existing arrangements, while offline payments would be free. The thorny question of how much digital currency individuals could hold would fall to the European Central Bank to determine, within limits set by the bloc's co-legislators.

The legislation does not itself compel the ECB to issue the currency; rather, it establishes the legal framework without which issuance would be impossible. The final decision to launch would rest with the central bank and could only follow formal adoption of the regulation. On the ECB's published timeline, an operational pilot is targeted for around 2027, with a possible first issuance later in the decade.

Proponents frame the digital euro as a matter of strategic autonomy. Officials have repeatedly cast it as a way to reduce Europe's reliance on non-European payment networks and to ensure that publicly issued money remains usable in an increasingly digital economy, an argument that has gained urgency amid trade tensions with the United States. The ECB has stressed that the digital euro would complement rather than replace cash, and has sought to address privacy concerns by emphasizing that it would not have access to users' personal data.

Those privacy and cost questions remain at the heart of the debate. Critics warn that a central-bank-issued digital currency could expand oversight of payments if safeguards are insufficient, and estimates of the implementation burden on banks vary widely, with industry-commissioned figures running well above the ECB's own.

The timing is striking. The committee's endorsement landed in the same window as a US Senate vote to bar the Federal Reserve from issuing a digital dollar for four years, underscoring how sharply the world's major economies are diverging on the question of state-issued digital money, with Europe pressing ahead while Washington moves to slam the door, at least for now.