Europe has been developing strategies and currencies to reduce its dependency on US payment services in a bid to strengthen its sovereignty.
European officials are once again calling to drop the region’s heavy reliance on non-European payment service providers like Visa and Mastercard over fears of future fallouts in relations.
Martina Weimert, Chief Executive of the European Payments Initiative (EPI) is the latest to recommend European businesses and merchants “urgently” adopt national payment schemes.
One such European-based payment service is Wero, launched in 2024 by the EPI. It has been adopted by some of its banking developers, such as Deutsche Bank and BNP Paribas, to reduce the dependence on US payment services and wallets, while also boosting European sovereignty.
“Yes, we have nice national assets like domestic card schemes, but we don’t have anything cross-border,” Weimer told The Financial Times.
“If we say independence is so crucial and we all know it’s a timing issue, we need action urgently.”
The EPI is made up of 20 major European banks whose core aim is to address payment challenges across the continent; their remit covers fragmentation, bolstering the adoption of instant, and consolidation within the peer-to-peer European payment services market.
While Wero is yet to come close to Mastercard’s 900 million branded cards in circulation across the European Union, it has amassed just shy of 49 million customers across the region in less than two years.
Political tensions over payment sovereignty?
One of the primary causes of the EPI and European Central Bank’s (ECB) push for greater payment and currency sovereignty in recent years is not just solely down to Visa and Mastercard’s dominance of the card market, but also a rise in political tensions across the Atlantic.
Since US President Donald Trump took office for his second term, he has championed a pro-US capital market with threats of tariffs on imported goods from regions like Europe.
In mid-January, these tensions appeared to reach boiling point over Trump’s insistence of claiming Greenland as US-land, which is under Denmark’s occupation. As the EU did not budge in its support for Denmark, Trump threatened a 10% tariff on imported goods from countries such as France, Germany, and the UK.
Not only is trade becoming a sore point between the US and Europe, but both regions are heavily divided on their views on the future of digital currencies.
Digital currencies draw lines in the Atlantic
Trump has made it no secret he wants the US to become the crypto capital of the world. He has established the Federal Bitcoin Reserve and passed the GENIUS and CLARITY Acts, the first crypto pieces of legislation to be passed in the House of Representatives.
The House also passed the Anti-CBDC Surveillance Act, which forbids the Federal Reserve from ever creating a central bank digital currency (CBDC) due to promoting financial freedom and opposes government surveillance of transactions.
In Europe, the ECB and its President Christine Lagarde have been heavily critical of Trump’s pro-crypto agenda, believing the promotion of crypto can cause financial instability to global banks if they follow Trump’s lead by holding mass amounts of crypto asset reserves.
The ECB has also been heavily promoting its digital euro project, a CBDC which the central bank believes will bring back sovereignty back in the hands of European banks, businesses and consumers.
Piero Cipollone, Executive Board Member of the ECB, revealed in a meeting in Cyprus on February 6 the Eurosystem has launched a strategy to settle transactions recorded on DLT in central bank money in a bid to combat against the growing popularity of US dollar-backed stablecoins such as USDC and USDT.
But Cipollone also raised concerns regarding the pressures being placed on European retail payments as consumers are swiftly moving away from cash, which is where a digital euro can come in to fill this void to accommodate digital-native consumers.
“By preparing for a digital euro, we are simply adapting to evolving technologies and preferences, and preserving Europeans’ freedom to pay with their money – the sovereign money issued by their central bank,” said Cipollone.
“As a digital form of cash, the digital euro would ensure that central bank money remains available and usable in an increasingly digital economy, upholding its role as a trusted anchor of our monetary system.”
