It’s been an incredibly intense start to 2026, with January building on the leitmotifs established in 2025: geopolitical uncertainty, market volatility, diplomatic tensions, macro-economic instability and trade conflicts.
Beyond the big ticket speeches at the World Economic Forum in Davos, EU digital policy continues to evolve, with important developments in the payments and market infrastructure space.
Here’s a quick recap of our top 3 most noteworthy EU institutional policy developments of the month and our take on why they matter:
- The growing political consensus around the need for ‘strategic autonomy’
A buzzword in the Brussels bubble for several years already, current geopolitical tensions are pushing this theme front and center of the political stage in Brussels. There is a growing political consensus that there is more downside risk to the EU from dependence on single, large providers of critical infrastructure (think US Bigtech) than upside advantage. This manifested itself this month in calls and initiatives for European solutions (cybersecurity; digital networks; open-source; Eurostack), with more expected in the near future (a ‘buy European’ preference and a revision of the EU public procurement rules to favor EU headquartered operators).
Why it matters: Transatlantic tensions are not – so far – spilling over into the financial services/digital assets policy arena, with the exception of payments (digital euro; dominance of US international payment schemes; multi-issuance stablecoins). Nonetheless, ‘strategic autonomy’ could still negatively impact the sector, potentially erecting regulatory barriers for internationally operating firms, stifling competition and reducing consumer choice.
- Digitalisation remains at the core of the EU’s transformation
Whilst there is no silver bullet as to how to bring about change, there remains a general acceptance about the importance of upgrading the EU economy and society for a digital age. This was underscored by Commission President Von der Leyen’s Davos speech, which showcased upcoming EU plans for an ‘EU Inc’ label (aka 28th regime) designed to allow digital start ups to register anywhere in the EU in 48hrs. Meanwhile, discussions progressed in Council on the proposal for an EU business wallet, with the Cypriot Presidency sharing a draft compromise text. The European Central Bank is also playing its part, with a significant announcement on the acceptance of DLT-based assets as eligible Eurosystem collateral as of March 30.
Why it matters: Despite the stereotype of the EU being a technological laggard compared to the USA or China, the EU continues to develop its regulatory framework as a means of building a more future-proofed economy. Digital assets and payment systems will be integral to this as business and citizens become more comfortable with digital solutions for identification and verification. Expect a further digital upgrade as co-legislators negotiate the market integration package.
- A retail CBDC for the EU on its way
After securing agreement between Member States at the end of last year, focus has moved to the European Parliament, where there is wide political backing for a simple, user-friendly digital euro, but differing views on its design and how quickly to move forward. MEPs are split over the balance between public and private roles in payment infrastructure and safeguarding EU sovereignty. There are also open questions around resilience, financial stability, and a viable remuneration model for payment service providers. For its part, the ECB held a focus session on its future pilot project, with more details and an expression of interest to follow in March.
Why it matters: Sovereignty concerns could see a toughening of the EU regime vis-a-vis international card schemes and/or stablecoin issuers as the EU doubles down on a public digital currency. The EU approach contrasts with the US’ stance, but also diverges from the Chinese on privacy and on interest-bearing, given China’s recent decision on digital yuan holdings. Diverging approaches make internal co-operation/coordination/interoperability difficult to envisage, potentially acting as a barrier to global finance and international payment systems.
