The European Central Bank is gearing up to challenge international payment giants by introducing its digital currency to strengthen Europe’s economic sovereignty.

The European Central Bank is preparing to challenge dominant American and Chinese payment systems with the introduction of a digital euro, according to Piero Cipollone, a member of the ECB’s executive board. Speaking in an interview with Le Monde, Cipollone highlighted the need for Europe to bridge the gap with the United States, particularly in the realm of technology and productivity.

Cipollone pointed out that while employment in the euro area has significantly improved, productivity growth remains a major concern, emphasizing that European firms, often smaller than their American counterparts, lag behind in investments in new technologies, limiting their global competitiveness.

The lack of scale and fragmentation across national lines has affected the financing and development of European firms, preventing them from effectively competing on the international stage. Cipollone used the example of the European Football Championship, where ticket purchases relied on American and Chinese payment solutions — like Mastercard and Alipay —, underscoring Europe’s dependency on foreign financial infrastructures.

“That’s one of the reasons why we are working on a digital euro, which would be an electronic form of cash for digital payments.”

Piero Cipollone, a member of the ECB’s executive board

You might also like: European Central Bank wants a digital euro, these four countries say ‘no’

To counter this, the ECB is advancing plans for a digital euro, envisioned as an electronic form of cash designed to facilitate digital payments. While no launch timetable has been revealed thus far, the ECB is currently in the middle of a two-year preparation phase to lay foundations and rules for a potential digital euro, with a decision due to be taken in late 2025.

Meanwhile, surveys have shown mixed reactions among European citizens regarding the digital euro. While nearly 90% of German households expressed openness to adopting a central bank digital currency, concerns about privacy persist, with 8% of respondents fearing the digital euro could be used to monitor payments. Deutsche Bundesbank president Joachim Nagel acknowledged the need for more public education on the matter.

Read more: European Central Bank allocates over $700m to propel offline digital euro development