By Jan Strupczewski
BRUSSELS, Jan 28 (Reuters) – The European Union needs to quickly create a digital euro to cut the bloc’s dependence on dominant U.S. payment companies, Economic Commissioner Valdis Dombrovskis said on Wednesday.
The European Central Bank has been working to introduce a digital euro since 2020 to modernise its payment system and ensure central bank money remains relevant in an increasingly digital world.
Progress has been slow, partly because of a lack of political urgency in Europe and some resistance from the banking sector.
But the willingness of the U.S. administration of Donald Trump to use economic pressure on Europe to achieve its goals, like in the case of Greenland, has helped focus minds.
“Today, our payments landscape is highly dominated by non-European providers. This makes us dependent on foreign-owned companies in an increasingly polarised and fragmented world,” Dombrovskis said at the European Banking Summit.
Almost two-thirds of all card transactions in the EU are now handled by U.S. giants Visa and Mastercard. Dombrovskis said such dominance made the EU vulnerable.
“Ceding such a degree of technological control over the EU’s economy to others could impede our ability to act autonomously. It poses real threats to our resilience and economic security,” he said.
A digital euro, to be used for online purchases as well as payments in shops, would solve that and work on it should be accelerated, he added.
“Europe needs a digital euro for the digital age. This digital euro should be seen in the broader context of improving Europe’s strategic autonomy,” Dombrovskis said.
The EU’s 27 governments agreed in December that they want a digital euro that would be usable anytime, anywhere, whether users are connected to the internet or offline.
Once they finish negotiating with the European Parliament, the ECB can issue the digital euro, which it has said could be operational by 2029.
(Reporting by Jan Strupczewski; Editing by Emelia Sithole-Matarise)
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