Published by Global Banking & Finance Review®
Posted on September 19, 2025
3 min readLast updated: January 21, 2026
Add as preferred source on GoogleEU finance ministers agreed on a digital euro roadmap to reduce reliance on US systems. The ECB's project faces legislative hurdles but marks a step towards European payment sovereignty.
By Jacob Gronholt-Pedersen and Jan Strupczewski
COPENHAGEN (Reuters) - European Union finance ministers on Friday agreed on a roadmap for launching a digital euro currency that aims to become an alternative to the now dominant U.S.-based Visa and Mastercard systems.
Discussions on a digital euro, essentially an electronic wallet backed by the European Central Bank, heated up this year because the EU is now keen to reduce its dependence on other countries in key areas like energy, finance and defence.
The ECB has pitched the digital euro as a way to cut Europe's reliance on U.S. credit cards and as a response to U.S. President Donald Trump's global push for stablecoins pegged to the U.S. dollar.
But the ECB, the main sponsor of the project, has failed so far to secure legislative approval for it, with lawmakers and bankers complaining it may hollow out banks' coffers, cost too much or curtail privacy.
In a sign of progress, EU finance ministers gathering with ECB President Christine Lagarde and European Commissioner Valdis Dombrovskis in Copenhagen on Friday reached an agreement on the next steps.
This will give EU finance ministers a say on whether a digital currency is issued and how many such euros each resident will be able to hold, which is seen as crucial for assuaging fears of a run on bank deposits.
"The compromise that we reached is that before the ECB makes a final decision in relation to issuance...there would be an opportunity for a discussion in the Council of Ministers," Paschal Donohoe, who chairs meetings of finance ministers, told a joint press conference.
Donohoe, Lagarde and Dombrovskis also celebrated a compromise on the procedure for setting the holding limit although they didn't give details.
A participant at the meeting told Reuters the ECB will also submit a proposed holding limit for approval by the European Council of Finance Ministers.
DELAYS TO LEGISLATION
Though the European Commission proposed digital euro legislation in June 2023, the other two institutions that have to sign off on it, the European Parliament and the European Council, have yet to do so.
The European Council aims to wrap up its side of the work by the end of the year.
The ECB hopes to have the legislation in place by June, after which it will need around two-and-a-half to three years to actually launch the digital euro.
Some EU countries have their own national digital payments systems, but none that would be accepted across the 27-nation bloc.
"The digital Europe is not just a means of payment, it is also a political statement concerning the sovereignty of Europe and its capacity to handle payment, including on a cross-border basis, with a European infrastructure and solution," Lagarde said at the press conference.
(Writing by Francesco Canepa; Editing by Aidan Lewis and Sharon Singleton)
The digital euro aims to provide an alternative to U.S.-based payment systems like Visa and reduce Europe's reliance on foreign currencies.
EU finance ministers agreed on a roadmap for launching the digital euro, which includes discussions on issuance and holding limits.
The European Council aims to finalize its work by the end of the year, with the ECB hoping to have legislation in place by June, followed by a launch in two-and-a-half to three years.
Concerns include potential impacts on banks' finances, high costs, and the risk of curtailing traditional banking services.
The digital euro is seen as a political statement about Europe's sovereignty and its ability to manage payments independently, including cross-border transactions.
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