The European Central Bank’s (ECB) plan to launch a digital euro by 2029 is facing strong resistance from the European banking industry.
It is not even certain how the report in the European Parliament will pass on that issue.
Namely, 14 large European banks, which include Deutsche Bank, BNP Paribas or ING, have warned that the digital euro could undermine payment systems in the private sector. Banks have joined forces to create a rival to American competitors such as Mastercard, Visa and PayPal. Last year, European banks launched the Wero payment service.
“The current design of the digital euro has mostly the same uses as solutions from the private sector and does not offer any clear added value to consumers”, is the view of the banks.
Conservative MEP from Spain Fernando Navarrete, who belongs to the group of the European People’s Party, was tasked by the parliament to prepare a report on the digital euro. He also advocates a narrowed version of that project, reports Financa.ba.
The ECB started looking at digital money in 2020, and last week the ECB Council formally decided to take the key steps to have the first digital euros operational during 2029 with a pilot set for 2027.
However, the project can only go forward with the green light of the member states and the European Parliament.
From 2020 to 2024, the use of cash in stores in the eurozone fell from 72 to 52 percent, with US card providers dominating the market. The rapid development of US stablecoins pegged to the dollar is seen by many as a threat to the role of the euro.
Eurozone finance ministers last month supported the digital euro plan and called on the European Parliament to adopt the necessary legal framework.
