Rapporteurs agree on digital euro design amid EU-US economic tensions
Parliamentary rapporteurs have reached an agreement on the digital euro, enabling it to function for both online and offline transactions.
As economic tensions escalate, the digital euro’s development reflects Europe’s strategic move to mitigate reliance on American payment systems, a significant shift in financial autonomy.
“Thanks to our amendments and firm stance, we have finally broken the political deadlock on the digital euro,” stated Pasquale Tridico, rapporteur for The Left.
Key developments
The Parliamentary rapporteurs have reached an agreement on the digital euro’s design, allowing it to facilitate both online and offline payments. This comes amid heightened economic tensions between the EU and the US.
Centre-right politician Fernando Navarrete recently withdrew his proposal to limit the digital euro’s scope to offline transactions, which had previously stalled negotiations. His change of position has been pivotal in advancing the legislative process.
Lawmakers still need to finalise details regarding “hold limits” and “compensation,” essential for determining wallet capacities and reimbursements for banks offering digital euro services. A vote in the economy committee is anticipated before summer.
EU Parliament unblocks key political hurdle in digital euro negotiations
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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.
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.
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 EU News.
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.