Europe’s growing reliance on non-European payment technologies risks undermining both monetary stability and strategic autonomy, according to Denis Beau, First Deputy Governor of the Banque de France. Speaking in Paris on 11 December, Beau argued that the rapid digitalisation of payments and finance has turned payment systems into a geopolitical issue, not just a technical one.
The decline of cash and the rise of card and online payments have brought speed and convenience, but at a cost. Most digital payments in Europe rely on non-European providers, particularly US card networks, increasing dependence on foreign standards, infrastructures, and data handling. Beau warned that this dependency weakens competition and raises risks around cybersecurity and fraud, especially as artificial intelligence makes scams more sophisticated.
Tokenisation and the threat of digital dollarisation
Beau also focused on the expansion of tokenised finance, which uses blockchain-style infrastructure to issue and settle financial assets. While tokenisation can reduce costs and improve transparency, it creates a new vulnerability. Today, settlement in tokenised markets relies almost entirely on dollar-backed stablecoins issued by lightly regulated, non-European firms.
This, Beau said, opens the door to “digital dollarisation” in the euro area. If such assets became widely used, they could weaken the euro’s role as a unit of account and means of payment, challenging Europe’s monetary sovereignty.
At the same time, the entry of big technology firms and multiple competing tokenisation platforms risks fragmenting post-trade infrastructure, making markets less efficient and harder to supervise.
The Eurosystem’s response
To counter these risks, Beau outlined three priorities. First, regulation. While Europe has strong payment rules under the Payment Services Directive (PSD2) and the forthcoming PSD3, he said the EU’s crypto framework still leaves gaps. In particular, he called for tighter limits on the use of non-European stablecoins for everyday payments.
Second, central bank money must evolve. Beau highlighted the digital euro as a way to ensure that “digital banknotes” remain available for everyday use across Europe, alongside private payment solutions. He also pointed to wholesale initiatives that would provide tokenised central bank money for financial institutions, keeping the safest form of money at the core of future markets.
Third, public money alone is not enough. Europe also needs robust private euro-denominated settlement assets issued by regulated institutions. Initiatives such as the European Payments Initiative and work on tokenised bank deposits and euro stablecoins are, in Beau’s words, essential complements to central bank efforts.
In conclusion, Beau made clear that innovation is unavoidable, but sovereignty is a policy choice. Europe, he argued, must build secure, pan-European payment solutions where public and private money coexist and remain interchangeable at par, or risk losing control of the monetary foundations of its digital economy.