The digital euro and its geopolitical ambitions

The digital euro offers Europe the opportunity to enhance the geopolitical strength of the euro and to establish a global payment system based on European values. To truly realise this potential, policymakers should consider designing the digital euro as a globally accessible means of payment that can be used by all economic agents around the world for instant and secure settlements. The current proposed design, with usage limits and access restricted to European residents, significantly undermines this potential. This policy brief analyses some aspects of the geopolitics of digital currencies and a critical weakness of the current tiered monetary system. It proposes policy adjustments that can enable Europe to fully realise the geopolitical potential of the digital euro.