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. (…)