ECB President Christine Lagarde warned that Europe could lose control over the core rails of future money movement if it fails to build its own digital payment and tokenized finance infrastructure. In a speech at the ECB conference on digitalisation and innovation in payments, she framed tokenization, central bank settlement, the digital euro, cross-border systems and payments sovereignty as part of one urgent strategic challenge. Her message was blunt: dollar stablecoins, US payment networks and non-European technology firms are moving into areas that sit close to the heart of monetary infrastructure.
Foreign card schemes still dominate European payments
One of the clearest parts of Lagarde’s speech focused on Europe’s dependence on external card networks. She said Europe still has no pan-European card scheme capable of competing across the region at scale. According to the figures she cited, international schemes account for more than 60% of European card payments, while 13 of the 21 euro area countries no longer have a national card scheme. Her point was simple: much of the network behind everyday taps and swipes in Europe is not owned by Europe.
Lagarde argued that the digital euro could change that equation. Because it would carry legal tender status, she said, it would have to be accepted across the European Union. In her view, that would give the bloc a payment instrument that works across the whole Union rather than leaving retail payments tied to networks controlled elsewhere. The issue, as she presented it, is larger than convenience at the checkout. It reaches into ownership of payment rails, control over settlement and long-term financial autonomy.
The ECB wants central bank money at the settlement layer
Lagarde also pressed the ECB’s case that tokenized finance should settle in central bank money. She warned that tokenized markets could splinter into isolated private systems if they grow without a trusted public settlement asset underneath. She said market participants had told the ECB they would not issue digital assets at scale unless they had access to central bank settlement infrastructure.
Her reasoning centered on trust and liquidity. In her words, nothing else is trusted and accepted by all in the same way, and nothing else can expand and contract with market needs so liquidity is present when the system needs it most. The ECB highlighted two initiatives tied to that effort, Pontes and Appia, both intended to support tokenized settlement and help shape a future European tokenized finance ecosystem.
Lagarde also gave the debate a geopolitical edge. She said ownership of financial infrastructure is increasingly functioning as an “instrument of power.” That places stablecoin infrastructure, digital currencies, financial messaging systems, cross-border payment networks and settlement rails inside a broader contest over who controls the architecture of global finance.
Europe is trying to catch up with faster-moving systems
The speech also pointed to pressure from outside Europe. Lagarde cited India’s UPI, Southeast Asia’s Nexus system and the global spread of stablecoins as examples of payment infrastructure moving quickly in other regions. Europe, by contrast, is still trying to assemble a more integrated framework while competition in cross-border payments continues to intensify.
The ECB said it is building links between Europe’s TIPS system and India’s UPI, working on connections to the Nexus network in Southeast Asia, and analyzing integration involving Switzerland’s SIC IP system. The stated goal is to let Europeans send money globally in seconds using infrastructure that remains under European control.
Legal fragmentation is another risk
Lagarde warned that infrastructure alone will not solve the problem if Europe rebuilds fragmentation through law. She said national regulatory regimes for digital assets are already multiplying, and argued that disconnected legal frameworks across member states could recreate divisions that technology is starting to remove.
The speech made clear that the ECB no longer sees tokenized finance and digital payments as a narrow technology discussion. The central question, in Lagarde’s framing, is who owns and controls the rails, settlement systems and cross-border channels behind the next phase of finance. With dollar stablecoins still expanding, Visa and Mastercard broadening digital asset infrastructure, and tokenized markets advancing, Europe’s push for a digital euro and a unified settlement architecture now sits closer to the center of its sovereignty debate.