According to CNBC, the European Central Bank is planning to start the development of its own digital currency. This measure is explained as protection against fraud. What is more, the ECB’s digital euro is the first step to reduce dependence on China and the US.
“The ECB is worried that the eurozone will end up in a geopolitical and economic sandwich position between the big tech companies of the USA and the payment systems of China without a digital euro,” Guido Zimmermann, senior economist at German bank LBBW, said. Without a digital euro, the condition of the eurozone economy will be alarming. “Right now, Europe lacks digital platforms,” Guido Zimmermann pinpointed. Notably, the ECB started to consider the issue of a digital euro in October 2021.
In November 2022, Christine Lagarde acknowledged the necessity of the digital currency. She supposes that the eurozone needs independence in this sphere. “The entry of big techs into payments could increase the risk of market domination and dependence on foreign payment technologies, with consequences for Europe’s strategic autonomy,” Christine Lagarde explained.
“Already now more than two-thirds of European card payment transactions are run by companies with headquarters outside the European Union,” the ECB President added.
