European Central Bank Chief Economist: The necessity of the digital euro has increased to combat stablecoins and non-EU tech giants' payment systems.

On March 21, European Central Bank (ECB) Chief Economist Philip Lane said that dollar stablecoins and electronic payment systems dominated by US tech giants are taking an increasing share of the European financial system, and that Europe needs a digital euro to meet this challenge. Electronic payment methods offered by big tech companies such as Apple Pay, Google Pay and PayPal put Europe at risk of economic pressure and external coercion. He stressed that the digital euro will provide a secure and universally accepted digital payment option under a European regulatory framework, reducing dependence on foreign payment systems, while limiting the influence of dollar stablecoins in the eurozone. Lane also noted that 99% of the current stablecoin market is made up of tokens pegged to the U.S. dollar, which could lead to a gradual peg of the Eurozone payment system directly or indirectly to the U.S. dollar instead of the euro. Like other major economies, the ECB is investigating the possibility of launching a central bank digital currency (CBDC) in response to the competition posed by stablecoins and payment systems for tech companies. According to Lane, the Eurozone is made up of 20 EU member states, and the payment system is fragmented due to different traditional standards in each country, and the digital euro will provide a unique opportunity to solve the problem of fragmentation of retail payments in the Eurozone.