Digital euro goes full sovereignty mode, US cloud giants not on guest list

Summary

Europe is taking a small step toward breaking its reliance on US Big Tech by hiring only cloud operators headquartered in the EU to work on the backbone of the digital euro project. French businesses OVHcloud and Scaleway are providing a sovereign European cloud infrastructure to support the digital currency, a European Central Bank scheme to enable electronic payments in shops, online, and person-to-person. Europe's cloud challenge: Building an Airbus for the digital age READ MORE The project's driving motivation is independence from American-owned payment networks. European payments are dominated by US companies like Visa and Mastercard, according to Finance Watch, which says that more than two-thirds of card transactions in the euro area were settled through international payment schemes in the second half of 2023. At the same time, Europe is also highly dependent on US tech giants for cloud compute services. Data from Synergy Research last year showed that local cloud providers make up just 15 percent of the European cloud market, while the three global giants – Amazon, Microsoft, and Google – take about 70 percent between them. That dependence carries real risk: as a Microsoft executive admitted under oath last year, the US CLOUD Act may compel providers to hand over any data stored on its systems to the American authorities, regardless of where in the world that data is held. To address this, the ECB restricted eligibility to EU-based providers only. In a statement sent to The Register, spokesperson told us: The SEPI system handles secure exchange of payment information between the organizations involved in the digital euro system. Experts The Reg spoke to approved of the move. "The ECB restricting eligibility to EU-based providers is sovereignty written into procurement policy, and that's the right call. Europe is actively choosing to invest in its own tech sector while protecting citizens' financial data from foreign jurisdiction. That matters," Informa Fell...