The European Central Bank (ECB) is doubling down on its push for a digital euro as concerns mount over the growing influence of U.S. dollar-pegged stablecoins in the region. In a fresh statement published April 8, ECB Executive Board Member Piero Cipollone emphasised that introducing a central bank digital currency (CBDC) is key to safeguarding the eurozone’s monetary sovereignty.
Cipollone argued that a digital euro “would limit the potential for foreign currency stablecoins to become a common medium of exchange within the euro area,” highlighting a mounting fear within the ECB that dollar-backed digital assets could gradually erode the euro’s dominance in domestic and cross-border transactions.
“Public-Private Partnership” Framed as Critical to Sovereignty
In his latest opinion piece, Cipollone warned that Europe’s dependence on foreign payment providers — including stablecoins and international card networks — poses systemic risks. He stressed that the EU faces a shrinking window to act decisively.
“Failing to act would not only expose us to significant risks but also deprive us of a great opportunity,” he wrote. “They could potentially result not just in further losses of fees and data, but also in euro deposits being moved to the US and in a further strengthening of the role of the dollar in cross-border payments.”
To address these threats, Cipollone called for a “public-private partnership to retain our sovereignty,” placing the digital euro at the centre of this strategy. He described it as “a sovereign European means of payment based on EU legislation.”
Decline in Cash Usage Highlights Urgency
Cipollone also touched on the declining role of cash, which he called the “only sovereign means of payment” in the current financial system. Although cash plays a “vital role” in inclusion and resilience, its use is increasingly marginalised due to the rise of e-commerce, which now accounts for roughly a third of retail activity in Europe.
“Cash cannot be used online, and it is often not possible to pay using a European payment service, meaning we need to rely on non-European payment systems,” he said.
He warned that unless action is taken quickly, Europe will become even more dependent on foreign payment infrastructure. “The time to act is now,” Cipollone urged, calling for progress on both the digital euro regulation and the legal tender status of cash.
Public Skepticism Remains a Major Obstacle
Despite the ECB’s push, the digital euro remains a hard sell among European citizens. A working paper published in March revealed that consumer interest is low, with privacy concerns and unclear benefits dampening enthusiasm.
Still, Cipollone and the ECB continue to frame the CBDC as a necessary evolution in the face of fast-moving financial digitisation and global currency competition. Whether the eurozone can overcome regulatory, technical, and public trust hurdles remains to be seen.
