Europe is working on a digital currency to reduce dependence on other regions

The European Central Bank is working on a digital currency as the region seeks to shield itself from tensions in other countries.

Guido Zimmermann, senior economist at German bank LBBW, said the ECB was concerned that without a digital euro, the euro zone would end up in a geopolitical and economic sandwich between big U.S. tech companies and Chinese payment systems. Currently, Europe lacks digital platforms.

Zsolt Darvas, a senior fellow at the Brussels-based think tank Bruegel, attributed the ECB’s move in this area partly to “the growing demand for cryptoassets” and the fact that many other central banks are also considering developing digital currencies.