The European Parliament paves the way for the launch of the digital euro to enhance monetary sovereignty.
The European Parliament has taken a major step toward introducing a digital euro, a project designed to strengthen the European Union’s monetary sovereignty and reduce dependence on non-European payment providers.
According to Austria’s news agency, the move follows years of preparation after the European Central Bank first presented the idea around six years ago. In June 2023, the European Commission proposed a concrete legal framework for the digital euro, but its launch requires approval from both EU member states and the European Parliament. Member states agreed to the plan last December, increasing pressure on lawmakers to act.
This week, the European Parliament backed a request calling for the project to move forward. The resolution says the digital euro is essential to protect the EU’s monetary sovereignty, reduce fragmentation in payment systems, and strengthen the stability and resilience of the single market. Supporters argue it would reinforce Europe’s role in digital payments and limit dependence on American online payment services.
Critics, however, warn that a state-backed digital currency could raise fears of surveillance or restricted access to money in extreme situations. Addressing these concerns, European Central Bank President كريستين لاغارد told lawmakers in Strasbourg that the ECB would not access users’ personal data and that the digital euro would never replace cash.
In January, a group of economists said in an open letter that the digital euro is crucial for Europe’s strategic independence amid geopolitical tensions. At the same time, several European banks expressed concern that the new currency could weaken demand for their digital banking services. The ECB has said the digital euro could be launched by 2029 if all legislative approvals are completed this year, following a pilot phase to test the system before full deployment.