EU Seeks Digital Euro to Reduce Dependence on US Payment Networks

The European Central Bank is pushing for the adoption of a digital euro to reduce Europe's reliance on American payment networks, particularly Visa and Mastercard. The EU policymakers consider this dependence a vulnerability that can be exploited by foreign powers, potentially disrupting financial transactions.

According to ECB figures, these two companies handle 61% of card payments within the eurozone and nearly all cross-border card activity. This means that each time a person pays by card or smartphone, their data is sent outside EU borders and held in jurisdictions like the United States, where it can be used for consumer profiling.

The introduction of a digital euro would enable direct transfers between bank accounts, promoting greater competition among payment networks and potentially yielding savings for both companies and individual shoppers. This move aligns with European Commission President Ursula von der Leyen's priorities to enhance Europe's competitiveness against larger enterprises from the US and China.

Former ECB president Mario Draghi has warned that global interdependence can create strategic vulnerabilities, allowing neutral powers to exploit economic ties for their own influence. The digital euro initiative aims to mitigate this risk by reducing Europe's reliance on foreign payment systems.