Digital euro needed to counter stablecoins and major non-European tech giants, says ECB chief economist
Philip Lane noted that the growth in the use of electronic payments through Apple Pay, Google Pay and PayPal “creates risks of economic pressure and coercion for Europe.”
Jamie Crowley | Edited by Sheldon Rebeck on 2025-03-20 16:53 UTC
What you need to know:
- ECB Chief Economist Philip Lane has pointed to the need for a digital euro to counter the growing influence of stablecoins in the European financial system.
- He also discussed the spread of electronic payments from large non-European tech companies such as Apple Pay, Google Pay and PayPal and the risks associated with them.
- According to Lane, the ECB has a stronger case for developing a CBDC than other central banks because the eurozone is a multilateral space.
The European Central Bank's (ECB) chief economist Philip Lane stressed that a digital euro is important to counter the growing influence of dollar stablecoins and US electronic payment systems on the region's financial system.
The rise of electronic payments from big tech companies such as Apple Pay, Google Pay and PayPal “creates a risk of economic pressure and coercion for Europe,” Lane said in a speech Thursday at University College Cork in Ireland.
“A digital euro would provide a secure, widely accepted option for digital payments under European governance, reducing reliance on foreign providers,” Lane said. “The availability of a digital euro would also reduce the likelihood of foreign-currency stablecoins becoming the primary means of exchange in the eurozone.”
Lane pointed out that 99% of the stablecoin market is made up of tokens pegged to the US dollar. This increases the likelihood that dollar-denominated stablecoins will be used heavily in the eurozone, with payment systems being “directly or indirectly pegged to the dollar rather than the euro.”
The ECB, like central banks in other advanced economies around the world, is considering the introduction of a central bank digital currency (CBDC). The need to overcome competition from stablecoins and corporate payment systems is often cited as a reason for doing so.
Lane added that the case for a CBDC may be more compelling, especially for the ECB, given that the eurozone spans multiple countries. The single currency is used by 20 European Union member states, and the eurozone lacks a single payment system due to different, outdated standards in different countries.
“The digital euro offers a unique opportunity to overcome the persistent fragmentation of retail payment systems in the eurozone,” he concluded.
