European Central Bank Chief Economist: Digital Euro Necessity Strengthened to Counter Stablecoins and Non-EU Big Tech Payment Systems

BlockBeats News, March 21st, Chief Economist of the European Central Bank (ECB) Philip Lane stated that USD stablecoins and electronic payment systems dominated by US tech giants are increasingly gaining share in the European financial system, and Europe needs a digital euro to address this challenge. Electronic payment methods provided by major tech companies such as Apple Pay, Google Pay, and PayPal are putting economic pressure and external coercion risks on Europe. He emphasized that the digital euro will provide a secure, universally accepted digital payment option within the European regulatory framework, reducing reliance on foreign payment systems while limiting the influence of USD stablecoins in the euro area. Lane also pointed out that currently, 99% of the stablecoin market consists of tokens pegged to the US dollar, which could lead to the gradual direct or indirect anchoring of the eurozone payment system to the dollar instead of the euro.

Like other major economies, the ECB is exploring the possibility of issuing a central bank digital currency (CBDC) to counter the competition from stablecoins and tech company payment systems. Lane believes that the euro area, consisting of 19 EU member states, has a fragmented payment system due to different national standards, and the digital euro will provide a unique opportunity to address the fragmentation of retail payments in the euro area.