European central bank chief emphasized the need for financial independence, warning the increased use of dollar-backed stablecoins.
The European Central Bank (ECB) is developing a digital euro to compete with foreign-currency stablecoins and lessen dependence on U.S. payment firms. Philip Lane, ECB Chief Economist, stressed that Europe must govern its financial system under geopolitical pressures.
European Central Bank Seeks Financial Independence With Digital Euro Initiative
Philip Lane told a conference in Cork, Ireland, that a digital euro would likely discourage enterprises from using foreign-currency stablecoins for payments.
He said the plan is essential to ensure Europe’s monetary independence and reduce third-party payments dependence.Given the expanding use of stablecoins tethered to the USD, the ECB believes a digital euro is necessary.
The institution has also raised concerns about economic vulnerabilities from its reliance on the American banking system. Visa, Mastercard, PayPal, Apple, and Google are examples.
Bo Hines, Executive Director of the US Presidential Working Group on Digital Assets, predicts stablecoin legislation in two months. Hines said Senator Hagerty’s GENIUS Act, which passed the Senate Banking Committee, is most likely to pass.
Lane warned that European stablecoin interest is rising rapidly, creating foreign financial dependence. He warned that dollar-backed stablecoins could weaken the euro’s significance in the region’s economy.
Our 2021 digital euro initiative will give a secure alternative to private digital assets. However, postponed EU legislation essential for its official rollout has delayed implementation.
Digital Euro as a Catalyst for Payment Evolution
A digital euro might reduce retail payments fragmentation, according to the European Central Bank. Lane said the currency would improve coordination among bank-payment service providers.
A central bank-issued digital currency is crucial for a monetary union like the eurozone, say officials. It would decrease external dependencies and give European consumers a trustworthy digital payment system.
Philip R. Lane said, Amidst escalating geopolitical tensions, there is a push for a digital euro. U.S. financial policies may harm Europe’s economy. Christine Lagarde, president of the European Central Bank, urged lawmakers to speed up retail and wholesale digital euro initiatives to improve Europe’s financial autonomy.
The support of U.S. President Donald Trump for dollar-backed stablecoins has also worried European politicians. This crypto technique could jeopardize the euro’s global economic standing, they say.
The newly created Crypto Caucus plans to pass major digital asset legislation by April in Congress. Following President Trump’s orders, lawmakers are prioritizing stablecoin legislation and market structure improvements.
