TLDR
- ECB Chief Economist Philip Lane emphasized the need for a digital euro to counter the influence of dollar-based stablecoins and reduce dependence on US payment companies
- The digital euro is seen as essential for Europe’s monetary and financial autonomy amid increasing geopolitical fragmentation
- According to ECB data, US firms process 65% of euro area card payments, creating vulnerability in Europe’s financial infrastructure
- This is the third time in 2025 that ECB officials have urged adoption of a digital euro
- The ECB has been developing the digital euro project since 2021 and is expected to conclude a preparatory phase by October
European Central Bank (ECB) Chief Economist Philip Lane has once again called for the creation of a digital euro. He stressed its importance in reducing Europe’s reliance on US payment firms and limiting the influence of dollar-based stablecoins.
Lane made these comments at a conference in Cork, Ireland on March 20. He said the digital euro central bank digital currency (CBDC) is key to keeping Europe’s monetary and financial systems independent.
The ECB economist pointed out that a digital euro would “limit the likelihood of foreign-currency stablecoins gaining a foothold as a medium of exchange in the euro area.” This comes as European interest in stablecoins continues to grow rapidly.
Currently, the stablecoin market is mostly tied to the US dollar. In fact, the US Dollar backs 99% of stablecoins in circulation today.
Lane also highlighted Europe’s heavy dependence on American payment providers. These include companies like Visa, Mastercard, PayPal, Apple Pay, and Google Pay.
According to ECB data, these US firms process 65% of all euro area card payments. Some EU countries have even completely replaced their national payment systems with these international alternatives.
Europe’s Payment Landscape at a Crossroads
This situation creates a weakness in Europe’s financial structure. It gives foreign companies control over critical parts of Europe’s payment infrastructure.
Lane argued that Europe “effectively outsources its payment infrastructure” by relying on international cards, apps, and stablecoins. This makes the region vulnerable to policy changes and regulatory actions from outside jurisdictions.
A digital euro could help address the fragmentation in Europe’s retail payments. It could serve as a unifying force for collaboration among banks and payment service providers across the region.
“The case for a central bank digital currency is especially strong for a monetary union, especially in the context of a fragmented and externally dependent payments system,” Lane added. He sees it as a way to strengthen Europe’s position in the global financial landscape.
The ECB has been working on the digital euro project since 2021. They are expected to finish a preparatory phase by October 2025.
This push for a digital euro comes amid broader global developments in digital currencies. China has been developing its digital yuan, while BRICS nations are pursuing their own CBDC initiatives.
Lane’s comments mark the third time this year that ECB officials have urged the adoption of a digital euro. Earlier in March, ECB President Christine Lagarde told lawmakers in Brussels that Europe must speed up progress on both retail and wholesale versions of the digital euro.
On March 17, ECB Governing Council member François Villeroy de Galhau expressed concerns about President Donald Trump’s push for crypto adoption. He warned that this could introduce financial instability.
In January, ECB board member Piero Cipollone called for an accelerated digital euro launch. This was in response to Trump’s executive order promoting dollar-backed stablecoins.
Cipollone warned that stablecoins pose a growing threat to traditional banking systems. He said they could erode bank revenues and client relationships if left unchecked.
The European Commission has already proposed draft legislation for the digital euro. This proposal is currently under review by the European Council and the European Parliament.
Lane warned that delays in launching a CBDC could leave Europe exposed to risks. This is particularly concerning as foreign stablecoins and non-European payment firms continue to expand their influence in the region.
The ECB believes that introducing a digital euro would provide a secure, widely accepted payment option under European control. This would reduce the region’s dependence on foreign payment providers and strengthen its financial sovereignty.
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