EU Parliament Approves Digital Euro CBDC Bill, Defying US Anti-CBDC Push

A central committee of the European Parliament voted in favor of a digital euro legislation. This has brought the European Union closer to moving forward with a central bank digital currency (CBDC). The initiative marks a high contrast to the United States, where the Senate just passed a bill to put a ban on CBDCs.

EU Parliament Moves To Greenlight Digital Euro Plans

The proposal was backed by the EP’s Economic and Monetary Affairs Committee on Tuesday, June 23. The move comes as policymakers try to enhance the bloc’s payment independence and lessen its dependence on financial infrastructure abroad. According to the latest estimates, the digital euro will be launched by 2029.

This vote follows European regulators’ discussions about the area’s reliance on U.S.-based payment networks. The European Central Bank (ECB) has revealed that Visa and Mastercard are responsible for 61% of all euro area card payments and almost all cross-border transactions.

The digital euro would be a digital form of the ECB’s central bank money. However, the officials have emphasized that it should not replace existing banking facilities, but be used in conjunction with physical cash. The move comes on the heels of Bank of England easing stablecoin rules, which shows growing adoption of crypto tech in EU.

Within the framework, digital euros would be stored in dedicated wallets by consumers and limits on holding will still be negotiated. The system also has the flexibility to accept payments both online and offline, and provides robust privacy features.

The ECB would provide the core infrastructure and banks and payment providers would provide payment services to users, per Bloomberg report.

After the vote, the ECB said “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.” Though ECB believes that stablecoins pose risk to the financial system, it has advocated for the digital euro initiative.

US Senate Passes New Bill With Anti-CBDC Clause

The EU’s decision is contrary to what is happening in the United States. President Donald Trump has backed private stablecoins but dropped plans for a CBDC from the Federal Reserve.

The U.S. Senate passed the 21st Century ROAD to Housing Act, 85-5. The bill includes a clause that restricts the Federal Reserve from creating a CBDC or any asset with similar characteristics before the end of 2030. Meanwhile, lawmakers are looking to advance the CLARITY Act for clearer crypto rules in the country.