ECB Executive, "Dollar stablecoin proliferation should be blocked with Digital Euro"

Piero Cipollone ECB Executive Board Member (Source: Bloomberg)

The European Central Bank (ECB) is strongly advocating the introduction of a digital euro to respond to the spread of US dollar-based stablecoins in Europe. Piero Cipollone, ECB Executive Board Member, stated on the 9th (local time) that the digital euro will be a key tool for protecting the monetary sovereignty of the Eurozone.

Cipollone warned that if dollar-linked stablecoins become a major means in Europe's payment market, the dependence on foreign currencies will increase and Europe's financial independence could be undermined. He emphasized, “If we do not act now, we will not only be exposed to serious risks but also lose important opportunities.”

He particularly pointed out that the US government is pursuing policies favorable to cryptocurrencies, expressing concern that the spread of dollar-based stablecoins could lead to fees, data loss, and even the transfer of euro deposits in Europe to the US. In this context, he explained that the digital euro could be a solution to protect sovereignty through public and private cooperation.

Cipollone noted that while cash is still a central means in Europe's financial system, the use of cash is gradually becoming limited as online consumption increases. He said, “If you cannot use cash online and cannot use European payment services, you will rely on foreign systems,” and emphasized the need to hasten the preparation of regulations on the digital euro bill and the legal tender status of cash.

However, contrary to the ECB's expectations, European citizens' reactions to the digital euro are skeptical. According to a report released by the ECB last month, many consumers question the practical necessity of the digital euro and cite privacy concerns as a major issue.

While the ECB shows its intention to protect monetary sovereignty and maintain an independent European payment ecosystem through the digital euro, there are still tasks of public consensus and institutional persuasion remaining for its actual introduction and spread.