EU committee backs digital euro as ECB pushes toward a 2029 launch

The European Parliament’s Economic and Monetary Affairs Committee has approved the digital euro, a central bank-backed payment instrument meant to reduce Europe’s dependence on US-controlled card networks. For PSPs and merchants, the important bit is not the symbolism; it is the proposed shift in who owns the rails, who sets the fees, and who gets to sit between the ECB and the customer.

1. The committee’s endorsement is part of a broader push for European payments sovereignty, with a projected launch in 2029. The digital euro would be issued and guaranteed by the ECB as central bank money, designed to sit alongside cash and existing banking services rather than replace them.
2. ECB data cited in the text says Visa and Mastercard together account for 61% of card payments across the euro area, and handle almost all cross-border card transactions in the bloc. That is the dependency the digital euro is meant to address.
3. Consumers would hold digital euros in a dedicated wallet, with the holding cap still to be confirmed. The system is intended to work for both online and in-person payments, and privacy is built into the design: the ECB would not be able to link payment data to individual identities.
4. The operating model keeps the ECB in charge of the infrastructure, while commercial banks and payment service providers would deliver services directly to customers. Financial institutions are set to receive compensation for participating, and merchants would face fees expected to be below those charged by card networks. The structure of that compensation model is still one of the main disputed points before negotiations with EU member states.
5. The European Parliament is expected to confirm the committee’s position in a plenary vote in Strasbourg in early July. The digital euro is entering a field already occupied by China’s digital yuan and Russia’s planned digital rouble, while the US has moved in the opposite direction under President Donald Trump, backing stablecoins instead of a Federal Reserve-issued digital currency.

For high-risk operators, the operational question is straightforward: if the digital euro moves from policy project to live rail, banks and PSPs will need to decide whether they want to distribute it, acquire it, or build around it. The committee vote does not answer those commercial questions yet, but it does make them harder to ignore.