Europe Can Lead In Tech

During this year’s World Economic Forum in Davos, one of the three main themes, besides AI and Trump, that dominated the event was “peak pessimism on Europe.” The argument was familiar: Europe is stagnating, unable to compete, and slowly turning into a museum.

There is definitely a lot of truth to this. Much of Europe — especially those parts west of Vienna, a.k.a. “Old Europe” — is way too static and statist (some would say borderline socialist). Many people are no longer used to working as hard as in the US and Asia and expect the government to care for their needs. In turn, governments love to tell people and companies how they should go about their daily business.

That being said, Europe is definitely not destined to become Argentina (the only country in modern history that used to be rich at some point but eventually became poor). The narrative of European decline is, more often than not, a failure of branding rather than substance. One friend once told me, “We Americans always oversell everything, while you Europeans always undersell.” Blackrock’s CEO Larry Fink seems to share this view.

Take technology. The battle for dominance is ongoing, and despite what some might assume, the U.S. is not destined by God to lead in everything. Just look at two of the most transformative areas today: AI and crypto.

AI is proving that execution matters as much as raw capital. DeepSeek has recently demonstrated that a serious AI competitor can emerge outside the U.S. without the colossal investments of Big Tech. And even though we can speculate about the truthfulness of DeepSeek’s claims, we cannot ignore that an under-the-radar business showed up and published an open-source model that seems to be better than its US-based competitors at a fraction of the cost. The idea that only US companies can lead in these fields is a myth. If execution and innovation drive AI forward, Europe has every chance to carve out a leadership position in the industry.

And then there’s crypto. This is where the story gets really interesting. The European crypto, blockchain, and digital asset economy remain the largest in the world. Yes, the relative size of European financial markets in TradFi may be shrinking, but in digital finance, Europe is at the forefront — and has been for years. The data backs it up: Chainalysis 2024 Geography of Crypto Report shows that Central, Northern & Western Europe (CNEW) accounts for 21.7% of the cryptocurrency value received, while Eastern Europe (EE) captured 11%. Combined, Europe accounts for over 32.7% of the entire cryptocurrency market, while Northern America is only 22.5%. This makes Europe the dominant crypto economy globally, with the largest inflows and trading volumes.

This has direct implications for euro-denominated stablecoins. The market is still in its early stages but set for exponential growth. Why? Because financial services are moving on-chain, and for on-chain finance to work at scale, you need a stablecoin in the local currency. So unless you believe that the ECB will cancel the euro and move to the dollar, the European market of more than 400 million euro holders already will need a major euro stablecoin.

Consider the fundamental principle of financial markets where liquidity follows utility. Right now, over 20% of global financial transactions happen in euros. That’s not going to change overnight. Europe is not about to dollarise or disappear from the financial map. The infrastructure for digital euro transactions is already forming, and when the adoption takes off, the euro stablecoin market will explode in size. I explained the reasoning behind the potential growth of euro stablecoins in my previous article here.

It’s becoming increasingly obvious that Europe needs robust, liquid and widely used euro stablecoins to facilitate transactions for both retail and institutional. Unlike USD-based stablecoins that pose unnecessary forex risk for European businesses and consumers, a euro stablecoin would allow seamless settlements in the region’s native currency. This is key for payments, lending, remittances and a variety of other financial services and use cases that blockchain enables.

The shift isn’t lost on European policymakers. EU regulators, including the European Commission, are waking up to the stakes. The EU set the stage with the world’s first regulatory framework, MiCA, and this is just the beginning. There’s a sense of urgency or perhaps even a bit of panic. But panic can be useful. It forces action.

The next few years will define the future of our continent. Europe has all the components it needs to become a leader in digital finance: a massive market, a clear regulatory framework and a vibrant crypto and fintech industry. What we just need is execution — and sometimes perhaps more ambition and more marketing. The world is accelerating forward, and Europe should be as well. The question isn’t whether the continent can lead in crypto and digital finance; it’s whether it chooses to step up and take its rightful place at the forefront of this transformation. The future of Europe and its people depends on it.