European Union finance ministers are meeting to discuss the creation of a digital euro, which could serve as an alternative to the U. S.-based Visa and Mastercard systems. The talks have been ongoing for six years but gained urgency this year as the EU aims to lessen its reliance on foreign countries for energy, finance, and defense. Spanish Finance Minister Carlos Cuerpo emphasized the need for an independent digital payment system to ensure Europe can progress quickly in this area.
While there is political support for the digital euro, the European Parliament has not yet passed the necessary legislation, citing the need for further refinement of the details. The European Central Bank (ECB) hopes that legislation can be in place by the first half of next year. EU Economic Commissioner Valdis Dombrovskis highlighted the importance of ascertaining Europe’s strategic autonomy and not depending on foreign payment systems, especially as online shopping continues to grow.
Though some EU nations have their own digital payment systems, there is no unified system accepted across the 27-member bloc. Concerns exist that the digital euro may undermine the banking sector and create stability risks. Once the Parliament approves the legislation, the ECB would need an additional two and a half to three years to launch the digital euro, which is seen as vital for both technological advancement and EU independence.
With information from Reuters
