The European Central Bank (ECB) has proposed the development of a digital euro explicitly intended to act as a supplement to physical cash within Europe’s payment system. This approach aims to strike a balance, fostering digital innovation while ensuring continued accessibility for traditional banknotes and coins.
ECB Executive Board member Piero Cipollone emphasized the importance of this dual strategy. He stated that maintaining both cash and the forthcoming central bank digital currency (CBDC) as accessible payment instruments is a core objective for the institution.
The ECB’s motivation extends beyond innovation, targeting a reduction in the systemic influence of dollar-pegged stablecoins. Officials believe the digital euro is essential for enhancing the eurozone’s monetary sovereignty and providing a resilient, regulated alternative within the digital payments landscape to safeguard Europe’s payment autonomy.
Supporting the emphasis on cash viability, independent research reveals that Europeans continue to prefer physical money despite the growth of digital options. This preference includes a desire to hold substantial amounts, up to €10,000 collectively across various assets.
The development of the digital euro is therefore positioned as a strategic initiative to complement cash and counterbalance the rise of privately-issued stablecoins, ensuring a European-governed core exists at the heart of the region’s evolving payment ecosystem.