One of the most intensely debated topics in the EU today is digital sovereignty. Recent developments, particularly in the US, clearly demonstrate that the EU should not blindly rely on non-European players. Instead, Europe must establish its own infrastructure to ensure independence and autonomy. Two critical payment-related initiatives stand out:
The European Digital Identity Wallet and European Business Wallet
They aim to provide end-users and businesses with secure digital identification, authentication, authorization, and signing capabilities within a European-owned infrastructure. Launch timeline: 2026
The Digital Euro
Designed to offer end-users digital payment capabilities—both online and offline—through various form factors (phones, cards, wearables) with 24/7 availability across all European countries. Details are still evolving, making complete evaluation impossible at this stage. Launch timeline: Uncertain (pending regulation and ECB decision)
Stablecoins
However, one crucial area often overlooked in these sovereignty discussions is stablecoins. Currently, we see two contrasting approaches:
🇺🇸 The US has recognized stablecoins‘ geopolitical potential, with President Trump signing an Executive Order preventing a digital dollar while supporting stablecoins. In short: Stablecoins yes, digital dollar no.
🇪🇺 The EU leads with comprehensive crypto regulation through MiCA—unparalleled globally. While the EU Commission celebrates this achievement, recent reports from Politico indicate the ECB is advocating for „MiCA 2.0“ to restrict foreign (e.g., US) stablecoins in Europe.
💡 This is where the conversation becomes interesting. As Alexander Bechtel notes: „Rather than fostering innovation and supporting private sector initiatives, there seems to be a growing belief that we can counter US dominance and defend European sovereignty in money and payments mainly through bans and a government-led payment solution aka the digital euro… Europe should defend its sovereignty through innovation, not prohibition.“ I could not agree more.
While the digital euro represents an important step toward strategic payment autonomy, I believe we need coexistence between the digital euro and stablecoins. Each addresses different use cases with distinct advantages and limitations. Focusing exclusively on one approach seems shortsighted and harmful to European interests.
With MiCA regulation already established, Europe has the potential to become a global leader in stablecoin innovation. But this potential must be recognized by all (!) stakeholders. We need to align our vision and strategy to truly advance European digital sovereignty in the global financial landscape.
