ECB chief economist: digital euro necessity grows to counter stablecoins and non-EU tech giants' payment systems

On 21 March, Philip Lane, Chief Economist of the European Central Bank (ECB), said that the US dollar stablecoin and electronic payment systems dominated by US tech giants are taking up a growing share of the European financial system, and that Europe needs the digital euro to meet this challenge. e-payments offered by large tech companies such as Apple Pay, Google Pay and PayPal are exposing Europe to economic pressure and the risk of external coercion. methods that put Europe at risk of economic pressure and external coercion. He emphasised that a digital euro would provide secure, universally accepted digital payment options within a European regulatory framework, reducing reliance on foreign payment systems while limiting the influence of the dollar stablecoin in the eurozone. lane also pointed out that 99 per cent of the stablecoin market currently consists of tokens anchored to the US dollar, which could lead to a gradual move towards eurozone payment systems that are directly or indirectly anchored to the US dollar, rather than the euro. Like other major economies, the ECB is looking into the possibility of launching a central bank digital currency (CBDC) in response to the competition posed by stablecoins and tech companies' payment systems. lane argues that the digital euro would offer a unique opportunity to address the fragmentation of retail payments in the eurozone, which is made up of 20 eU member states and has a fragmented payment system based on differing legacy standards from country to country.