ECB to challenge American, Chinese payment system with digital euro

The European Central Bank is preparing to challenge international payments giants by launching a digital currency in a bid to strengthen Europe’s economic sovereignty.

The European Central Bank is preparing to challenge the dominant American and Chinese payment systems with the introduction of the digital euro, according to Piero Cipollone, a member of the European Central Bank’s executive board. Speaking in an interview with Le Monde, Cipollone stressed that Europe needs to close the gap with the United States, particularly in technology and productivity.

Cipollone said employment in the eurozone had improved significantly, but productivity growth was still a major concern, stressing that European firms were lagging behind in investing in new technologies because they were often smaller than their American counterparts, limiting their global competitiveness.

Lack of scale and fragmentation across national lines has hampered the financing and development of European firms, preventing them from competing effectively internationally. Cipollone highlighted Europe’s dependence on foreign financial infrastructures using the example of the European Football Championship, where ticket purchases relied on American and Chinese payment solutions such as Mastercard and Alipay.

“That’s one of the reasons why we are working on the digital euro, which would be a form of electronic cash for digital payments.”

Piero Cipollone, Member of the ECB Executive Board

To counter this, the ECB is advancing plans for a digital euro, envisioned as a form of electronic cash designed to facilitate digital payments. While no launch timetable has been announced so far, the ECB is currently in the middle of a two-year preparation phase to outline the foundations and rules for a potential digital euro, with a decision expected in late 2025.

Meanwhile, surveys have shown mixed reactions among European citizens to the digital euro. While around 90% of German households say they are open to adopting a central bank digital currency, privacy concerns remain, with 8% of respondents fearing the digital euro could be used to track payments. Deutsche Bundesbank chief executive Joachim Nagel acknowledged that more public education is needed on the subject.