Europe has established a “comprehensive payments strategy.” Shared by the European Central Bank (ECB) this week, the goal is to support the four ambitions:

• to ensure the effectiveness of monetary policy, financial stability, and the smooth functioning of payment systems by maintaining the role of central bank money as the anchor of a two-tier monetary system,
• to achieve strategic autonomy and increased resilience for European payments,
• to foster an integrated, competitive, and innovative payments ecosystem, and
• to support the euro’s international role.

The payments strategy aims to develop a market for tokenized settlements while investing in distributed ledger technology (DLT-Blockchain) for wholesale payments.

The strategy seeks to preserve the role of central bank money. With the digital euro project, the Eurosystem is said to be adapting central bank money to the digital age.

Cross-border transfers are predicted to become faster, cheaper, more transparent, and inclusive.

Regarding stablecoins, or privately issued payment digital assets, Europe states that properly designed stablecoins – those that adhere to MiCA and AML compliance also serve the objectives of the payments strategy.

Arjeh van Oijen, Head of Product Management at Icon Solutions, says the ECB’s payment strategy is a clear acknowledgment that Europe’s payments landscape needs to evolve quickly to maintain reliability and resiliency. At the same time, it must support tech like tokenized assets and stablecoins.

“What stands out is the focus on consolidation. Amid rapid change, payments can no longer sit in silos – whether retail, B2B, domestic, or cross-border. Consolidating payment processing infrastructures is increasingly a pre-requisite for competitiveness in a market where speed, security, and scalability across all payment types is increasingly non-negotiable,” says van Oijen.

He believes the real challenge is execution. Will the ambition be able to create a payment solution in a short time? van Oijen says this requires a solution that can be adjusted or extended without being dependent on a vendor.

“Only in this way do banks stay in control of their own destiny.”