Europe shaken by emerging digital currencies in China and the US

The European region is not comfortable with the progress made by China and the US when it comes to digital currencies. However, Europe is not doing enough to modernize its financial system. The situation is not only a risk to its competitiveness but also its sovereignty.

Facebook’s proposed digital currency, Libra has already faced bottlenecks in Europe even before its launch. Moreover, US payment providers such as Visa, MasterCard are likely to feel start feeling the choke from regulators in Europe. The European Central Bank is currently working on alternatives that could see regional companies retain dominance in the payment sector.

A statement by Benoit Coeure, ECB’s board member last week in Brussels highlighted:

“The EU may be more exposed to the risk that the monetary power of others is not used in its best interests, or is even used against it.”

The same threat had been echoed by the European Commission Vice President Valdis Dombrovskis who said:

“It has become clear that for certain strategic technologies, the capacity to drive cutting-edge innovation will determine our sovereignty as a continent. Payments is one of those strategic technologies.”

In reference to Facebook’s past history of managing data, Dombrovskis said that the private social media company was unfit for such a project that is desired by many. He reckons that there is a gap in Europe that must be filled before companies like Facebook take over.

“It indicates that yes, clearly, there is a gap in offer for cheap, fast and convenient payments,” Dombrovskis asserted. “This is what we should be working on.”