Tensions With U.S. Underline Need for Digital Euro, Says ECB's Cipollone

By Paul HannonGrowing tensions between the U.S. and the European Union over trade and security underline the need for the eurozone to develop and adopt a digital euro, a senior official at the European Central Bank told lawmakers Tuesday.The EU has been troubled by President Trump's imposition of tariffs on imports from the bloc and what it perceives as a weakening of the trans-Atlantic military alliance.Speaking to lawmakers at the European Parliament, ECB executive board member Piero Cipollone said "recent international developments" underscore the risk of relying on foreign payment systems such as those provided by Visa and Mastercard to move money around the bloc."Europe cannot afford to rely excessively on foreign payment solutions," Cipollone said. "Doing so makes us dependent on the kindness of strangers in a context of heightened geopolitical tensions."European governments have announced increases in defense spending to reduce their reliance on the U.S. in the event of a conflict with Russia. In the wake of its invasion of Ukraine, they also cut purchases of oil and gas from Russia and have been investing heavily to build up renewable sources of energy.Cipollone said it is necessary to take similar steps with payment systems."The urgency of preserving our autonomy in defence and energy is already extremely clear," he said. "But ensuring autonomy for essential services like daily payments is just as urgent. Without it, we are vulnerable to geopolitical threats and risk losing our monetary sovereignty."Write to Paul Hannon at [email protected]