EU Pushes Digital Euro to Cut Reliance on U.S. Payment Systems
European policymakers are accelerating plans for a digital euro as they seek greater control over the region’s payment infrastructure and reduce dependence on U.S.-based networks such as Visa and Mastercard.
The European Union is pushing ahead with plans for a digital euro, positioning the proposed central-bank digital currency as a way to strengthen Europe’s financial and technological independence. European policymakers argue that too much of the bloc’s payment infrastructure is controlled by companies based outside Europe, creating strategic vulnerabilities at a time of increasing geopolitical tensions. The European Central Bank has specifically said a digital euro built on European infrastructure could help the region regain greater control over its payment systems.
A major concern is Europe’s reliance on U.S.-based payment networks. ECB data indicates that Visa and Mastercard account for about 61% of card payments in the euro area, while the two companies handle almost all cross-border card transactions. European officials argue that this dependence could become problematic if geopolitical tensions were ever to disrupt access to foreign-controlled payment infrastructure.
The proposed digital euro would function as an electronic form of central-bank money, complementing physical cash rather than replacing it. It is planned to support both online and offline payments, with the offline option designed to provide privacy characteristics closer to cash. Commercial banks and payment providers would distribute the digital euro, while the underlying system would be built around European infrastructure.
The project is moving toward a potential 2027 pilot, involving 36 payment-service providers, with retail availability targeted for 2029 if the necessary legislation is approved. European policymakers are also developing other locally controlled payment initiatives, meaning the digital euro is part of a broader effort to create alternatives to foreign payment networks rather than a standalone project.
The push reflects a much larger debate about financial sovereignty and technological independence. Europe wants its businesses and consumers to have reliable payment options that remain under European rules and infrastructure, particularly as digital payments become increasingly important. If successfully introduced, the digital euro could reduce Europe’s dependence on foreign payment systems while giving the euro area a public digital-payment option designed for the continent’s own needs.
