According to Cointelegraph, the European Central Bank (ECB) has emphasized its dedication to maintaining public money at the core of Europe's financial system, even as stablecoins and private digital currencies gain popularity worldwide. ECB Executive Board member Piero Cipollone stated in a blog post that euro banknotes and coins will continue to be integral to the financial ecosystem, complementing the central bank's digital euro initiative. Cipollone assured that the digital euro will not replace physical currency but will enhance payment autonomy by providing cash in both physical and electronic forms.
The ECB's statements come at a time of rapid growth in crypto payments and a shifting financial landscape where stablecoins are increasingly used for cross-border transactions and everyday purchases. The ECB is actively developing a state-backed digital euro to offer a regulated alternative to privately issued stablecoins. Cipollone highlighted the importance of creating a digital euro to limit the influence of foreign currency stablecoins in Europe, warning that failure to do so could pose risks and result in missed opportunities for the bank. Despite the push for digital currency, Cipollone reiterated the indispensability of cash, especially during crises when digital infrastructure may be inaccessible. He emphasized that cash, along with digital euros, will remain a legal tender, accessible anytime and anywhere, catering to diverse payment preferences.
An ECB study conducted in March revealed that Europeans showed limited interest in the digital euro. The study indicated that when respondents were asked to allocate 10,000 euros across various assets, only a small portion was allocated to the digital euro, suggesting minimal impact on traditional assets like cash. In a separate blog post, ECB adviser Jürgen Schaaf called for global coordination in regulating stablecoins to address the dominance of the US dollar. Schaaf outlined strategic options for the European Union, including regulated euro-pegged stablecoins, distributed ledger technology applications, and the digital euro, to combat the rise of dollar stablecoins. As the financial landscape evolves, the ECB remains committed to ensuring that public money, both physical and digital, remains central to Europe's financial system.