ECB data shows Visa and Mastercard handle 61% of euro-area card payments. The digital euro would use dedicated wallets with holding limits still under negotiation.
A European Parliament committee voted Tuesday to advance legislation creating a digital euro, pushing the bloc closer to a central bank digital currency while the U.S. moves in the opposite direction.
The Economic and Monetary Affairs Committee approved the proposal, which now heads to a full Parliament vote. The European Central Bank has said the digital euro could launch by 2029.
The legislation is part of a broader push by EU policymakers to reduce reliance on U.S.-based payment networks. ECB data shows Visa and Mastercard handle 61% of all euro-area card payments and nearly all cross-border transactions.
"We welcome that the European Parliament's ECON Committee has agreed on its position on the single currency package, which will safeguard euro cash as legal tender while also shaping the digital euro," the ECB said after the vote.
The digital euro would function as a digital form of ECB central bank money. Consumers would store it in dedicated wallets, with holding limits still under negotiation. The system would support both online and offline payments. The ECB would provide the core infrastructure, while banks and payment providers would handle user-facing services.
Officials have stressed the digital euro is meant to complement physical cash, not replace it.
The vote comes as the Bank of England has eased stablecoin rules, signaling growing institutional acceptance of digital currency technology across Europe.
The EU's trajectory contrasts sharply with U.S. policy. President Donald Trump has backed private stablecoins but dropped plans for a Federal Reserve CBDC. The U.S. Senate passed a bill that includes a clause restricting the Fed from creating a CBDC before the end of 2030. Lawmakers are also advancing the CLARITY Act to establish clearer crypto rules.
For Mastercard, which processes a significant share of euro-area card payments, a digital euro could shift the competitive dynamics of European payments. The company's Alpha Score sits at 62/100, with a Moderate label in the Financials sector. The digital euro's launch timeline means any structural impact on payment volumes would play out over years, not quarters.
The full Parliament is expected to vote on the digital euro legislation later this year.
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