ECB President Lagarde Warns Europe Risks Losing Payment Sovereignty to Dollar Stablecoins

European Central Bank President Christine Lagarde warned at an ECB meeting that Europe risks losing payment sovereignty as U.S. dollar stablecoins and foreign networks increasingly shape future financial infrastructure. According to ChainCatcher, she said Europe lacks its own pan-European card network, while international card schemes account for more than 60% of card payments in Europe, and 13 of 21 euro area countries no longer have a national card scheme. Lagarde said a digital euro could help change that dynamic because its legal tender status would require acceptance across Europe. She also argued that tokenized finance needs central bank money to scale safely, adding that market participants have indicated they would not issue digital assets at scale without central bank settlement infrastructure. Lagarde said the ECB is advancing two initiatives, Pontes and Appia, and is building links between TIPS and India’s UPI as well as Southeast Asia’s Nexus system. She cautioned that if member states pursue separate legal frameworks, Europe could recreate legal fragmentation even as technology reduces fragmentation, and said the competition has become a geopolitical and sovereignty issue.