Can Europe’s Digital Euro Succeed Where America Refused To Try?

The European Parliament's lead economic committee approved a legal framework for a digital euro, advancing a central bank digital currency the bloc aims to launch by 2029.

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Digital Euro Vote

Lawmakers on the Economic and Monetary Affairs Committee backed the framework on Tuesday, Jun. 23, ending three years of clashes between central and commercial banks. They also ordered an immediate start to final negotiations with the bloc's 27 member states. The European Central Bank welcomed the outcome, calling it a step that protects euro cash as legal tender while shaping a digital version.

The digital euro would be a digital form of central bank money, built to sit beside cash rather than replace it. Consumers could hold the new currency in dedicated wallets, and the system is designed to offer strong privacy that shields routine purchases from the central bank's view.

Commercial banks and payment firms would handle access, while merchants pay fees set below today's card charges. A cap on individual balances remains unset, and the currency would work both online and offline, with the offline mode promising cash-like privacy. According to central bank figures, Visa and Mastercard handle 61% of card payments in the euro area and nearly all cross-border transactions.

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US CBDC Ban

The timing draws a stark contrast with Washington. The Senate passed the 21st Century ROAD to Housing Act on Monday, Jun. 22, by 85-5, folding in a clause that bars the Federal Reserve from issuing a digital dollar through 2030.

The housing package now heads to the House for a vote within days, then on to the president's desk for a signature. The measure carves out private stablecoins, and President Donald Trump has scrapped plans for a Fed-issued CBDC in favor of privately run tokens like those from Tether and Circle. China and Russia, meanwhile, keep advancing their own state-backed money, with Moscow set to roll out a digital rouble later this year.

ECB President Christine Lagarde has long argued that public digital money is needed to blunt the spread of dollar-pegged stablecoins across European payments. Italian lawmaker Pasquale Tridico, who steered the file, called the approval a major win for citizens and small businesses.

The euro project has advanced in fits and starts since its 2021 launch, with a formal preparation phase opening only in late 2023. The file then sat gridlocked for months. A resolution earlier this year finally broke the impasse and pulled the long-stalled legislation back onto lawmakers' agenda.

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