Digital Euro Plan
EU Committee Approves Digital Euro Plan to Boost Sovereignty, Pilot Set for 2027
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Key Points
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13 of the 21 eurozone countries lack their own domestic card payment schemes.
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The digital wallet would be created through a bank or a public institution such as a post office and funded by transferring money from an existing account or depositing cash.
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An offline mode would function similarly to using physical cash, enabling transactions without real-time network connectivity.
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Officials stress the privacy design includes no possibility to identify who makes digital-euro transactions.
The European Parliament's economic committee voted 43-14 on June 23 to approve draft rules for a digital euro, dealing a major blow to Visa and Mastercard's grip on European payments. The European Central Bank wants to roll out the new currency by 2029, with a 12-month pilot starting in mid-2027, according to CoinCentral.
The push is about power as much as payments. More than 60% of card transactions in the eurozone run through non-European firms. ECB President Christine Lagarde has put it bluntly: no digital euro means no sovereignty. The move comes as trade tensions with the US have made European leaders nervous about depending on American-owned financial rails.
Why Europe Feels Trapped by US Payment Giants
The numbers tell a stark story. Fifteen of the 21 eurozone countries have no widely used domestic card payment system of their own, according to Moneycheck. That means most everyday purchases — at the grocery store, online, at a café — flow through Visa or Mastercard networks headquartered in the United States.
European officials worry this is a vulnerability, not just an inconvenience. If Washington wanted to pressure Europe financially, it could lean on those networks. ECB Executive Board member Piero Cipollone warned that public money must follow payments as they move online — or the ECB loses its ability to act as an anchor of stability, according to Parameter.
How the Digital Euro Would Actually Work
The digital euro would live in a dedicated wallet, set up through a bank or a public institution like a post office. Users would fund it by transferring money from an existing account or depositing physical cash. It would work in stores, online, and person-to-person — but it would not replace bank accounts, according to The Edge Malaysia.
A key feature is an offline mode that works like handing over a banknote — no internet connection required. Privacy is built into the design. Online transactions use a method called zero-knowledge proofs, which lets a payment go through without revealing who made it. Officials say the ECB will have no way to identify individual users or trace what they buy, according to Fox26 Medford.
Banks Push Back Hard on Costs and Deposit Risks
The banking industry is not celebrating. The European Banking Federation estimates the overhaul could cost up to €18 billion. The ECB's own estimate is far lower — between €4 billion and €5.8 billion. That gap reflects a deeper fight over who bears the burden of building out the new system, according to Moneycheck.
Banks also fear what economists call disintermediation. If people move savings from bank accounts into digital euro wallets, banks lose cheap funding they rely on to make loans. The ECB has discussed holding limits — potentially around €3,000 per person — to cap how much money can flow out of the banking system at once, according to CoinCentral.
What Comes Next Before the 2029 Launch
The committee vote is not the finish line. Formal negotiations between the Parliament, EU member governments, and the European Commission are expected to begin in July 2026. The goal is to wrap up final legislation by the end of 2026, according to Parameter. After that, the ECB sets up its own infrastructure — estimated to cost around €1.3 billion — before the pilot begins.
ECB advisor Alessandro Giovannini said the long runway to 2029 is deliberate. "Banks and merchants need time to prepare so they can roll it out smoothly and at scale," he said. Political opposition remains. Far-right groups in the Parliament voted against the measure, citing surveillance fears. A full plenary vote still lies ahead before the rules become law, according to Fox26 Medford.
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