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“It is imperative that the ECB introduces a digital euro,” said Philip Lane, the main economist of the European Central Bank, in a recent speech. At the beginning of last month, Paschal Donohoe, president of the Eurogroup of finance ministers, spoke of a “higher level of emergency” in progress to a digital currency. Pay attention. These comments show that even when Donald Trump’s tariffs call most of Europe’s attention, some Europeans are alert to the next geoeconomic front: an impulse from the United States to underpin their domain of international payments.
They are right to worry. Among the burst of executive orders of Trump is one that promotes the worldwide use of “private” privately issued in US dollars. There are many reasons to wait for him to put muscle behind him. His administration is full of people deeply involved in the payment technology business, such as Elon Musk (which came for the first time with PayPal) and Howard Lutnick (which has ties with the tether of the Stablecoin issuer). It is possible that these switches are not seen face to face with the old ruling elite on much, but they agree on the power and profits that American control should retain on global payments.
That system is on the cusp of a great change, for political and technological reasons. The weapon of the dollar -based financial system, takes into account how the United States has reduced access by adversaries to fast messages for bank transfers, has caused alternative missions. Ideas include a currency system and payments administered by and for BRICS countries. Technologies such as Stablecoins offer an instant, cheap and 24/7 alternative to the expensive, slow and cumbersome legacy of the correspondent bank.
So, the fight for the domination of the future payment system is underway, and the United States wants to win. The broader European public can be happily unconscious. But those in charge of the Eurozone are also determined that this battle for technological control over the economy is one that the EU should not lose. This is the fundamental motivation for the digital euro: an official digital currency issued by the Central Bank that, if it is done well and quick enough, will rival or exceed the attractiveness of the stable of dollars.
Without him, Europe faces dangers that we have known for some time, since the unfortunate 2019 Facebook proposal for its “Libra” electronic currency. Even before that, Europe discovered that when Trump made sanctions to Iran, Europe could not act autonomously because it was very difficult to process commercial payments without banks exposed to the United States.
The fact is that the Eurozone already depends surprisingly on US payment mechanisms. Some two thirds of card payments in the Eurozone are processed by non -European card suppliers, says the ECB; 13 of the 20 countries that use the euro do not have national card payment systems. In those cases, “when you are going to buy milk, it is [physical] Effective or Visa/Mastercard ”, as a European central banker says. This unit is replicated in the rapid spread of mobile applications.
If the US stable. UU. They obtain generalized use, the final risk is the “digital dollar”, where sales platforms encourage buyers and vendors at prices, transactions and maintain equilibrium in such tokens. This undermines the control of a central bank of the national monetary conditions.
All this is ignored by those who belittle the euro digital project as a solution in search of a problem. But the signals are that their ranks are decreasing. Until now, the Euro Digital project is on the defensive, is necessarily the mother of the invention, but is welcome. However, it also expires the positive arguments for the digital euro. One is the simple idea that if a nationally free digital payment technology, it can replace the suppliers of foreign tariff load payments, it is equivalent to eliminating a transaction tax on economic activity in and with the Eurozone.
Another is that a digital euro could compete with Dollar Stablecoins for international businesses. The ECB is already investigating how to link it with non -euro coins. But it must go further. The retail model that is currently being contemplated, with a limit on the low thousands of how much can be maintained in the euro digital wallets (to prevent users from leaving the banks), will not satisfy the commercial need for payments without problems along the cross -border supply chains, for example.
But the most important benefit is that a digital infrastructure for automated digital contracts, “rails” of payment whose security is guaranteed by the Central Bank, creates a completely new technological economy. Compare with the way smartphones brought the application economy. Beyond autonomy, this is an opportunity for Europe to compensate for its delay in technological innovation. The time for a digital euro is now.
Martin.sandbu@ft.com
