As stablecoins and private digital currencies continue to gain global momentum, the European Central Bank (ECB) reaffirmed its commitment to keeping public money—both physical and digital—at the heart of Europe’s financial system.
In a blog post published Monday, ECB Executive Board member Piero Cipollone emphasized that euro banknotes and coins will remain a key part of the financial landscape, even as the central bank moves forward with its plans for a digital euro.
“A digital euro will not replace banknotes and coins, but will instead complement them,” Cipollone wrote, noting that having the euro available in both physical and digital forms will enhance Europe’s payment sovereignty.
The ECB’s remarks come amid the rapid rise of crypto-based payments and a changing financial environment in which stablecoins are increasingly used for cross-border transactions and everyday spending.
The ECB’s push for a digital euro
The European Central Bank (ECB) is working on a state-backed digital euro designed to offer a regulated alternative to privately issued stablecoins.
In remarks made on April 8, ECB Executive Board member Piero Cipollone said a digital euro would help curb the influence of foreign stablecoins as a common means of payment within Europe. He warned that without a central bank digital currency, the ECB could face increased risks and miss out on key opportunities in the evolving financial landscape.
Despite the growing momentum behind digital currencies, Cipollone reiterated that cash remains essential—especially during times of crisis when digital systems may be unavailable.
“Cash is here to stay,” he wrote. “As we move forward, consumers in the euro area will benefit from having banknotes, coins, and digital euros in their wallets—all with legal tender status, available anytime and anywhere, and suited to different payment needs and preferences.”
However, public enthusiasm for a digital euro appears limited. A study released by the ECB in March found that Europeans showed minimal interest in using it. In a working paper published on March 13, when respondents were asked to allocate €10,000 across various assets, only a small fraction was assigned to the digital euro, with little effect on traditional holdings like cash.
Europe Faces Stablecoin Dominance Without Unified Regulations
In a blog post published Thursday, ECB adviser Jürgen Schaaf urged global cooperation on stablecoin regulation to counter the growing dominance of the US dollar.
Schaaf highlighted several strategic options available to the European Union to respond to the rise of dollar-backed stablecoins, including the development of regulated euro-pegged stablecoins, adoption of distributed ledger technology (DLT) solutions, and the advancement of the digital euro.
