The future digital euro took an important first step in the European Union this Tuesday, after MEPs from the European Parliament’s Economic and Monetary Affairs committee approved the regulation that will frame this new form of payment. The proposal will still need to go through new stages before final approval.
According to , the negotiating position was approved in Brussels by 43 votes in favor, 14 against and one abstention. The president of the parliamentary committee, Aurore Lalucq, classified the vote as “a historic day for Europe”.
European alternative to digital payments
The digital euro is thought of as an electronic currency of the European Union, issued by the European Central Bank. The aim is to create a European public alternative for digital payments, reducing dependence on international networks such as Visa and Mastercard.
According to the European Parliament, the digital euro should be a safe, private and free means of payment. The proposal foresees that it can be used in both online and offline environments.
This possibility is relevant because it would allow payments between devices even without an internet connection, bringing the digital euro closer to some characteristics of physical money.
How it might work
The approved text foresees that the digital euro will work through an account-based system for online payments. Offline operations could be carried out directly between local devices.
Privacy protection emerges as one of the central points. MEPs defend the use of technologies that allow transactions to be validated without exposing users’ personal data.
The idea is to ensure a balance between innovation, security and protection of citizens. The digital euro will not replace physical money, but it could become another payment option in everyday life.
Limits to protect banks
The European Parliament proposes limits on the amount of digital euros that each citizen can hold. The measure aims to avoid negative impacts on the banking system and financial stability.
These limits must be defined by the European Commission, based on recommendations from the European Central Bank, and may be reviewed periodically.
Companies, on the other hand, will not be able to maintain permanent balances in digital euros. The exception will be the accumulation of payments received for a maximum period of 24 hours.
Companies may have to accept
The proposal foresees that most companies will be obliged to accept payments in digital euros. Even so, there should be exceptions for self-employed workers and micro-enterprises that do not accept other digital payment methods.
Basic services associated with the digital euro should be free for users. This includes account opening, fund management and payment instrument provision.
Free payment is presented as a way of ensuring that the new payment method is accessible to citizens and companies, without additional costs for essential operations.
Process is not finished yet
Despite Tuesday’s approval, the digital euro is not yet ready to enter circulation. The text will have to be approved in plenary in the European Parliament and then negotiated with the Member States in the Council of the European Union.
Only after these steps can the legislation be definitively adopted. Still, the vote marks an important step forward in a project that could change the way citizens and companies make payments in Europe.
For now, the main message is that the digital euro has gained political strength in the European Parliament. If it moves forward, it will be a new public, European and digital payment option, designed to complement physical cash and reinforce the European Union’s financial autonomy.
Also read:
