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Gold Slips Over 2% as Dollar Holds Firm on Fed Rate-hike Expectations
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Gold Slips Over 2% as Dollar Holds Firm on Fed Rate-hike Expectations

From Asharq Al-Awsat · () English

Summarized and contextualized by DistantNews.

At a glance

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  • The EU is moving towards creating a digital euro to reduce reliance on US payment systems like Visa and Mastercard.
  • EU lawmakers are set to vote on the virtual currency, proposed by the European Central Bank in 2020.
  • The digital euro, envisioned for citizens by 2029, aims to offer a sovereign, pan-European payment solution with privacy protections and an offline mode.

The European Union is advancing its plan to introduce a digital euro, a move aimed at curbing the bloc's dependence on dominant US payment systems such as Visa, Mastercard, Apple Pay, and Google Pay. EU lawmakers are scheduled to vote on the virtual currency, a project first proposed by the European Central Bank (ECB) in 2020 due to Europe's lack of a unified digital payment infrastructure.

Payment systems are "not neutral" but "instruments of power".

— Gilles BoyerCentrist EU lawmaker Gilles Boyer explaining the geopolitical significance of payment systems.

The digital euro, if approved, is intended to provide a local alternative for both online and in-store payments, accessible via card, app, or banking application. The ECB hopes to make it available to citizens by 2029, contingent on EU negotiators finalizing the underlying rules by the end of the current year. A pilot program is slated to begin in mid-2027 to test its practical implementation. Alessandro Giovannini, an advisor at the ECB, noted that this timeline allows banks and merchants adequate time for preparation.

We, Europeans, have had many wake-up calls about our dependence on the US. We're fully awake now, but we're not always acting.

— Gilles BoyerCentrist EU lawmaker Gilles Boyer commenting on Europe's reliance on US technology and financial systems.

Functionally, digital euros will hold the same value as physical currency. Users will need to set up an account with a bank or public institution and transfer funds. Payments can then be made using various methods, and officials emphasize robust privacy protections, including anonymity for transactions and an offline mode comparable to cash. Giovannini stressed that the digital euro would complement, not replace, existing payment methods like cash and private options, thereby preserving consumer choice in an increasingly digital world.

It wouldn't replace anything. Cash would still be available, and people could use existing private payment methods.

— Alessandro GiovanniniAlessandro Giovannini, advisor to the digital euro director at the ECB, explaining the role of the digital euro alongside existing payment options.

The initiative stems from a desire for greater economic sovereignty. Centrist EU lawmaker Gilles Boyer stated that payment systems are "instruments of power" and that the EU has had "wake-up calls" regarding its reliance on the US. He cited Washington's 2025 sanctions against International Criminal Court judges as an example of the influence wielded by US firms. Tuesday's vote is seen as a significant step toward realizing a "sovereign, pan-European payment solution."

preserve their freedom to choose how to pay as daily life becomes more digital

— Alessandro GiovanniniAlessandro Giovannini, advisor to the digital euro director at the ECB, describing the benefit of the digital euro for consumers.
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Originally published by Asharq Al-Awsat. Summarized and contextualized by our editorial team with added local perspective. Read our editorial standards.

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