Europe Gives Consideration to Digital Currency in Fight Against U.S. and China’s Tech Supremacy
Quick Summary
As tensions between the United States and China have grown, the European Central Bank has been working on a digital currency in order to protect itself from external influence. Mastercard, Visa, PayPal, Alipay, and UnionPay are the top companies for payments, but none of them are European. In October 2021, the ECB began investigating the feasibility of a digital euro and EU heads of state will need to decide whether they should move ahead this fall. Without a digital euro, the risk is that Europe will become an economic and geopolitical sandwich between US tech companies and Chinese payment systems. This would put Europe’s strategic autonomy at stake. Already more than two-thirds of European cards transactions are processed outside of Europe, demonstrating the need for a digital euro. ECB President Christine Lagarde addressed this point in November, highlighting both the risks and importance of such a project going forward.
Full Story – Europe considers a digital currency as it strives to counter U.S. and China’s tech dominance
The European Central Bank is working on a digital currency as the region seeks to protect itself from tensions with China and the United States. Mastercard, Visa, PayPal, Alipay, and UnionPay make up the top global companies for payments, but none of them are European. European officials have discussed the need to be more autonomous and less reliant on other parts of the world for several years.
The European Central Bank is working on a digital currency as the region seeks to protect itself from tensions with China and the United States.
The central bank started investigating the feasibility of a digital euro back in October 2021. This fall, the heads of state across the EU will have to decide if the ECB should push ahead with the next steps, which include testing the necessary technical arrangements so Europeans can spend digital euros.
“The ECB is worried that the eurozone will end up in a geopolitical and economic sandwich position between the big tech companies of the USA and the payment systems of China without a digital euro. Right now, Europe lacks digital platforms,” Guido Zimmermann, senior economist at German bank LBBW, told CNBC Wednesday.
ECB President Christine Lagarde acknowledged that point during a speech in November. “The entry of big techs into payments could increase the risk of market domination and dependence on foreign payment technologies, with consequences for Europe’s strategic autonomy,” she said.
“Already now more than two-thirds of European card…
