US dollar stablecoins and electronic payment systems dominated by US tech giants are taking an increasing share of the European financial system and Europe needs a digital euro to meet this challenge, said Philip Lane, chief economist at the European Central Bank (ECB). The electronic payment methods offered by big tech companies such as Apple Pay, Google Pay and PayPal put Europe at risk of economic pressure and external coercion. He stressed that the digital euro would provide secure, universally accepted digital payment options within the European regulatory framework, reducing reliance on foreign payment systems while limiting the influence of US dollar stablecoins in the euro area. Lane also pointed out that 99% of the current stablecoin market is made up of tokens pegged to the US dollar, which could lead to the eurozone payment system gradually pegging directly or indirectly to the US dollar rather than the euro. Like other major economies, the ECB is examining the possibility of launching a central bank digital currency (CBDC) in response to competition from stablecoins and payment systems from tech companies. Lane believes that the Eurozone is made up of 20 European Union member states, and the payment system is fragmented due to different traditional standards in each country. Digital euro will provide a unique opportunity to solve the problem of fragmentation of retail payments in the Eurozone.