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🇮🇩 Indonesia /Elections & Politics

EU lawmakers pave way for 'Digital Euro' negotiations

From Tempo · () Indonesian

Translated from Indonesian, summarized and contextualized by DistantNews.

At a glance

News From a news agency New plan
  • European Parliament lawmakers voted to support negotiations for a digital euro, signaling a move towards creating a digital version of the bloc's currency.
  • The digital euro aims to reduce the EU's dependence on U.S. payment systems like Visa and Mastercard and enhance payment choices for citizens.
  • Key challenges include ensuring the digital euro does not destabilize European banks by attracting deposits, especially during crises, while officials stress it will offer an alternative, not a replacement, for cash and private payment methods.

European Parliament lawmakers have signaled their support for creating a digital euro, voting in favor of renewed negotiations to establish a digital version of the bloc's currency. The vote saw 416 delegates in favor, 169 against, and 22 abstentions, paving the way for discussions with member states later this month. The EU parliament and member nations aim to reach an agreement by the end of 2026, with the European Central Bank (ECB) potentially making the digital euro available in 2029.

preserve their freedom to choose how to pay as daily life becomes more digital.

— Alessandro GiovanniniAlessandro Giovannini, advisor to the digital euro director at the ECB, explained the goal of providing consumers with more payment choices.

The digital euro is envisioned as a strategic move to lessen the European Union's reliance on U.S. payment systems such as Visa, Mastercard, Apple Pay, and Google Pay. Currently, non-European companies handle nearly two-thirds of card payments in the eurozone, and many member states lack a national card scheme for everyday transactions. The ECB believes the digital euro will provide greater choice and preserve citizens' freedom to choose their payment methods as daily life becomes increasingly digital.

It wouldn't replace anything. Cash would still be available, and people could use existing private payment methods.

— Alessandro GiovanniniGiovannini clarified that the digital euro would coexist with cash and other payment options.

Officials emphasize that the digital euro will incorporate high privacy standards, safeguarding user identity and offering an offline mode as confidential as cash, rejecting rumors of it being a tool of control. However, a significant challenge lies in preventing the digital euro from functioning like a full cash bank account, which could lead to deposit drains from European banks, particularly during financial crises. Experts suggest that ensuring the digital euro acts as a complementary option rather than a substitute for cash and existing private payment methods is crucial. Officials have stressed that it will be an alternative, not a requirement, and cash will remain available.

an alternative, not a requirement

— Fernando Navarrete RojasEU lawmaker Fernando Navarrete Rojas echoed the sentiment that the digital euro would offer a choice, not an obligation.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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