The European Union Parliament showed its first support for the launch of the digital euro on Tuesday. The Parliament endorsed the European Council’s call for a central bank digital currency with both online and offline functionality.
The parliamentary decision comes as two amendments were added to the European Central Bank’s annual report shortly before the vote. Up to 420 lawmakers voted for the First Amendment, with 158 voting against and 64 absent. However, 438 lawmakers voted for the Second Amendment, with 158 against and 44 absent.
European lawmakers urge ECB to boost its monitoring of digital assets
The Parliament’s backing is crucial, as the European Central Bank requires legislative approval from Parliament before it can issue a digital euro. The initiative also means the central bank’s goal of a 2029 launch depends on regional lawmakers signing off.
The EU’s stance on the digital euro marks a shift from previous proposals focused only on offline payments. The shift also signals better alignment with the ECB on preserving the region’s monetary sovereignty. The MEPs called for a digital euro that enables access to payment services and provides usable public money in both online and offline forms.
European lawmakers also called for the ECB to advance its monitoring of virtual assets. The MEPs warned that the shift to digital payments could create new forms of exclusion for merchants.
Europe’s push for a digital euro aims to enable the bloc to make online payments without relying on U.S payment systems. A legislative amendment stated that the digital euro is essential to reduce fragmentation in retail payments and to support the integrity and resilience of the single market.
The initiative follows Europe’s efforts to break its dependence on foreign firms, such as Visa and Mastercard. Christine Lagarde, President of the ECB, on Monday revealed that the digital euro will be built on European infrastructure to reduce excessive reliance on foreign payment system providers critical to the region’s economy.
The EU first proposed the digital euro in June 2023, but it stalled in countries such as Germany, awaiting support of member states and approval from European lawmakers. A number of nations in the bloc gave their green light to the digital euro in December, putting pressure on lawmakers.
ECB’s president calls for a tokenized central bank money
Lagarde stated that the bloc needs to complement physical cash with the digital euro. She argued that cash cannot be used for digital payments and also noted that its share in day-to-day payments is declining as a result.
Lagarde believes that a digital euro will provide consumers across the bloc with a solution accepted for all digital payments. She also revealed that the digital euro will ensure greater privacy, even though the central bank will not have access to personal data.
The ECP president added that the digital euro will benefit businesses in the region by reducing merchant fees. She argued that it will allow European private payment service providers to expand the reach of their services with ease.
Largarde also urged lawmakers to make tokenized central bank money available to support the development of an integrated crypto-based European ecosystem. She said the initiative will ensure the ecosystem has a risk-free, euro-denominated, European asset at its core.
The ECB’s president said the initiative needs to settle DLT-based wholesale transactions in central bank money. She revealed that the bank’s project Pontes will provide a solution for the initiative in Q3 of 2026. Another goal Lagarde highlighted was the ECB’s Appia project, aimed at creating an integrated European market for virtual assets from the outset.
Source: https://www.cryptopolitan.com/eu-parliament-endorses-digital-euro-frame/
