Europe's Payment Sovereignty Problem Runs Deeper Than Cards

The debate over payment sovereignty in Europe has been misguided, according to Prof. Dr. Joachim Wuermeling. The focus on card schemes and American dominance is misplaced, he argues.

The real exposure lies not with the cards in our pockets but with the currency behind them - the US dollar's central role in global financial markets. European banks are deeply embedded in dollar-denominated markets, with a significant share of large cross-border transactions still transiting through the dollar system.

This subjects European institutions to US sanctions regimes and extraterritorial legislation, regardless of European political positions. The fines imposed on European banks over the past decade illustrate this imbalance clearly.

The solution lies not in replacing one payment brand with another but in strengthening the euro's international role. A wholesale digital euro could strengthen euro-denominated settlement between banks and large institutions globally, while a digital euro for business-to-business use as a token for DLT settlement would provide a reliable payment rail for smart contracts and industrial applications.