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The European Union has moved a significant step closer to launching a digital version of its currency. On Tuesday, the European Parliament’s Committee on Economic and Monetary Affairs (ECON) approved the legal framework for the digital euro, marking a milestone in the bloc’s efforts to modernize its payment landscape.
The proposal passed with 43 votes in favor, 14 against, and one abstention, clearing the way for the full Parliament to consider the measure in early July. If no objections are raised, negotiations with EU member states can begin.
A European Alternative to U.S.-Dominated Payment Systems
Supporters of the initiative argue that a digital euro would strengthen Europe’s strategic autonomy in the financial sector. Today, cashless payments in the EU rely heavily on U.S.-based companies such as Visa, Mastercard, and PayPal. A digital euro, issued by the European Central Bank, would offer a homegrown alternative for online purchases, in-store transactions, and peer‑to‑peer payments.
A key feature of the proposal is the offline payment function, which would allow users to transfer funds without an internet connection—an option designed to mimic the privacy and immediacy of cash.
Privacy at the Core
EU officials emphasize that privacy protections are built into the system from the start. The framework envisions the use of advanced technologies such as zero‑knowledge proofs, which allow transactions to be verified without revealing personal data. According to the proposal, only the minimum amount of personal information necessary to operate the system would be processed.
Austrian MEP Angelika Winzig (ÖVP) welcomed the development, saying the digital euro would enhance both European sovereignty and the role of cash. She stressed that the legislation explicitly protects the legal obligation to accept cash, while the digital euro would remain an optional payment method.
Criticism From the Right
The far-right Freedom Party of Austria (FPÖ) remains sharply opposed. FPÖ MEP Roman Haider warned that the digital euro could pave the way for “the abolition of cash and the surveillance of citizens,” arguing that Europe’s existing payment systems already function reliably. He criticized the project as adding unnecessary bureaucracy and technological dependence.
Next Steps
The digital euro is still far from becoming a reality. The full European Parliament will review the committee’s decision in early July. If no objections are raised, formal negotiations with EU governments can begin. Only after those talks—and subsequent technical preparations—could the digital euro eventually be introduced.
The European Commission maintains that the digital euro is intended to complement, not replace, cash, and insists that privacy safeguards will remain central throughout the development process.
- Hector Pascua with reference from heute.at/picture: pixabay.com
