- European Central Bank (ECB) confirms ongoing support for both cash and digital currency in Europe’s financial system.
- Digital euro will not replace traditional banknotes and coins, but complement them, according to ECB Executive Board member Piero Cipollone.
- ECB emphasizes importance of regulated digital euro to counter risks from foreign and private stablecoins.
- Recent ECB study finds low consumer interest in digital euro, with only a small share allocated compared to cash.
- ECB advisers urge global coordination on stablecoin rules to address potential dominance of US dollar-backed digital assets.
The European Central Bank (ECB) reiterated its intention to maintain public money, in both physical and digital forms, as a central feature of Europe’s economy. This announcement comes as stablecoins and private digital currencies increase in popularity on a global scale.
On Monday, ECB Executive Board member Piero Cipollone stated in a blog post that euro cash—meaning banknotes and coins—will remain in use, even as the ECB develops its digital euro project. Cipollone said, “A digital euro will not replace banknotes and coins but rather complement them,” stressing that offering cash in both traditional and electronic formats will help secure Europe’s payment systems.
The ECB is working on the digital euro as a state-backed alternative to privately issued stablecoins, which are cryptocurrencies pegged to regular currencies. Cipollone noted that without a digital euro, foreign stablecoins could become more common as a method of payment in Europe. He explained that this could reduce the ECB’s influence over financial stability and payment systems. Cipollone also highlighted that “Cash is here to stay,” and emphasized the importance of having payment options that work during digital outages or crises.
A March ECB study found that the European public is currently not very interested in the digital euro. In the research, participants allocated only a small amount from a simulated portfolio of $10,800 (€10,000) to digital euros, showing little movement away from traditional cash.
In a related blog post, ECB adviser Jürgen Schaaf called for global regulation and cooperation to prevent dominance of US dollar-based stablecoins in Europe. He suggested options like regulated euro-pegged stablecoins, using distributed ledger technology, and further developing the digital euro. These steps could help the European Union manage risks tied to foreign digital currencies in its financial system.
Despite progress on digital payments and crypto products, the ECB maintains its stance that traditional cash will remain available and have legal status across the euro area. This allows European consumers to choose between coins, banknotes, and the upcoming digital euro for daily transactions, all with equal legal recognition and accessibility.
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