Published on
EU lawmakers have overcome a key political hurdle in the negotiations of digital euro, making the project closer to approval, according to a draft text seen by Euronews.
The Parliamentary rapporteurs involved in the legislation have found an agreement on the design of the digital euro, which will be able to function both online and offline.
The digital euro would be an electronic form of cash issued by the European Central Bank, designed to sit alongside banknotes and the payments services offered by commercial banks.
It has taken on new political weight as economic tensions between the EU and the US sharpen the debate over Europe’s reliance on American payment giants, such as Visa and Mastercard.
Under the European Commission’s proposal, digital euro users would have a wallet for both online and offline payments, with transactions designed so they are not trackable.
The situation in Parliament changed on Wednesday evening, when the centre-right politician Fernando Navarrete, who is the leading rapporteur on the file, announced the withdrawal of his position to reduce the scope of the digital euro to offline use only.
His position blocked the advancement of negotiations for months, jeopardising the whole legislative process, according to three sources familiar with the negotiations.
The political deadlock has pushed EU leaders to accelerate progress on the digital euro. At the European Council meeting on 19 March, they set a goal to have the digital euro legislation approved by the end of 2026.
With the Council, representing EU countries, having already adopted its position, the European Parliament is now the only institution left to advance the law.
“Thanks to our amendments and firm stance, we have finally broken the political deadlock on the digital euro. The distinction between online and offline has been removed, and it is now established as a single payment system,” Pasquale Tridico, the rapporteur for The Left, told Euronews.
However, lawmakers still need to agree on two key aspects: the “hold limits” and the “compensation.”
The hold limits determine the maximum amount a user can store in a digital euro wallet, while compensation sets out a model for reimbursing commercial banks that provide digital euro services.
Although negotiations are not yet complete, the text is expected to be voted on in the Parliament’s economy committee before the summer, according to a source familiar with the matter.
Read the full article here