The European Central Bank has renewed its push to promote the euro globally, expanding currency swap and repurchase arrangements with other central banks. But these efforts run into a structural wall: the EU lacks the political and fiscal unity needed to create the deep, liquid debt market that would make the euro a serious rival to the dollar among global investors.

Jacob Kirkegaard, a senior fellow at Bruegel and nonresident senior fellow at the Peterson Institute for International Economics, writes in Foreign Affairs that "the ease of dollar-based cross-border transactions and the dollar's global scale will keep most private actors from switching to other currencies," "Hvylya" reports.

The payment infrastructure gap runs even deeper. Visa and Mastercard handle roughly two-thirds of card transactions in the eurozone. Early US dominance in stablecoin and token technologies threatens to widen this lead further. Europe has struggled for years to scale up local private payment platforms that could compete with American firms. Country-specific digital transfers, in-store payments, and e-commerce alternatives remain fragmented across the bloc.

A digital euro project is underway at the European Central Bank, designed for retail transactions and blockchain-based settlement. Together with related initiatives, it could lay the groundwork for an independent European cross-border payment system. But Kirkegaard notes that this system "is not expected to be ready for use until the end of this decade."

The gap between ambition and implementation leaves European governments in an uncomfortable position. They are "increasingly uneasy about the dominant role of the U.S. dollar in the global financial system," Kirkegaard writes, given Washington's consistent willingness to wield dollar access as a sanctions weapon. Yet forcing private companies to abandon US financial infrastructure would require European alternatives that match American offerings in convenience, cost, and sophistication - alternatives that do not exist today.

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