Archive: https://archive.is/2025.04.06-041655/https://www.ft.com/content/40f6e292-839c-4d1f-994e-59bed627b909
(…) That system is on the cusp of huge change, for both political and technological reasons. The weaponisation of the dollar-based financial system — note how the US has cut off access by adversaries to Swift messaging for bank transfers — has prompted quests for alternatives. Ideas include a currency and payments system run 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 correspondent banking.
So the fight for domination of the future payments system is on — and the US wants to win. The broader European public may be blissfully unaware. But those in charge of the Eurozone are also determined that this battle for technological control over the economy is one that the EU must not lose. This is the fundamental motivation for the digital euro — a central bank-issued official digital currency that, if done well and fast enough, will rival or outperform the attractiveness of dollar stablecoins.
Without it, Europe faces dangers we have known about for some time — since Facebook’s ill-fated 2019 proposal for its “Libra” electronic currency. Even before that, Europe discovered that when Trump placed sanctions on Iran, Europe could not act autonomously because it was so hard to process trade payments without US-exposed banks.
The fact is that the Eurozone is already shockingly dependent on American payment mechanisms. Some two-thirds of card payments in the Eurozone are processed by non-European card providers, says the ECB; 13 of the 20 countries using the euro do not have national card-payment systems. In those cases, “when you go to buy milk, it’s either [physical] cash or Visa/Mastercard”, as one European central banker puts it. This dependence is replicated in the rapid spread of mobile apps. (…)
Europe faces dangers we have known about for some time — since Facebook’s ill-fated 2019 proposal for its “Libra” electronic currency
It’s the other way round. Facebook was defeated by Visa/Mastercard. It shows the power of Visa/Mastercard.
Musk is also attempting to create a payment processor with X. That should have been mentioned, as well as an explanation for why the EU didn’t start earlier. Similarly, there is no explanation for why a digital currency is needed instead of just the euro.
The article seems to be conflating a payment processing system with digital currency. While it would certainly be beneficial for the EU to develop their own processing system, I don’t really think they need a digital currency to do that?
Yeah i think youre right. I think its a lack of understanding about what a digital currency is by the article writer. It seems like they’ve heard cryptocurrencies are an alternative to other payment methods but don’t understand why. They’re probably confusing the concept of a digital currency for the block chain technology itself.
A block chain could be used as a method for clearing payments, but it wouldn’t necessitate creating a new digital currency. Existing assets and currencies can be tokenised in a block chain, and the block chain still used to validate and record the transaction.
That doesnt get away from the real issue - its not the method thats the problem, its that Visa/MasterCard control the market. Europe would need to actively try and break that duopoly. Its well overdue.
I didn’t understand this push for digital currency too because currency is digital already. Turns out they always meant a common payment system that goes through a central authority like they do with FED and all USD denominated transactions globally.
The euro and the dollar and such are not digital currencies, you just use the computer to communicate with your bank and the account. I don’t know the fine workings and I would struggle to explain why that’s not the same even in my own language. But I believe that the numbers in your bankaccount are a registration of all the ins and outs over time so the bank basically has an actual calculation of how much ‘real’ money they own you, where with a digital currency each single unit is registered somewhere, so if you transfer it there is an actual transfer of ownership.
Common government-managed payment processor with minimal fees would unshackle European businesses from unnecessary vampirism of Visa and Mastercard. It would also make tax and other financial authorities have a better insight and control of the markets, possibly offloading AML to external oversight. Don’t really see much downsides unless your paranoidal about your own government but I trust commercial entities even less.
