EU Tackles Dependence on US Payment Systems with Digital Euro

Europe's dependence on US payment systems has become a growing concern for EU leaders. They see this reliance as a risk that Europe can no longer ignore, given the possibility of foreign infrastructure being used as a geopolitical weapon.

The European Central Bank (ECB) is seeking approval for the digital euro in the European Parliament, citing concerns about political pressure and sudden disruption. The institution warns that if US companies like Visa and Mastercard were to shut down their services, it could have severe consequences for Europeans' everyday purchases.

Data from the ECB shows that these two US giants account for 61% of card payments in the euro area and almost all cross-border transactions. This means that every time a card or mobile phone is used to make a payment, information leaves the EU and is stored in a third country, such as the US.

The digital euro is seen as a way to reduce Europe's dependence on foreign systems and promote its own economic sovereignty. The project aims to create an EU-wide electronic payment structure, allowing for both online and offline transactions. Commercial banks and payment service providers will offer digital euro services to their customers, with merchants expected to pay lower fees than they currently face.

The digital euro is still in the final phase of negotiations between the European Parliament and Member States. Final approval is currently envisioned by the end of the year, with the currency set to become available for retail payments from 2029 after a pilot program starting in 2027.