Piero Cipollone, member of the ECB executive board, highlighted the relevance of the digital euro for the health of sovereign payments in Europe. He also remarked that such a solution would maintain banks in the financial loop, while stablecoins seek to sidestep them.
ECB Defends Digital Euro Thesis as Sovereign Cash Alternative
The European Central Bank (ECB) has defended the emergence of its Europe-wide central bank digital currency (CBDC) as a cash alternative to maintain the autonomy and sovereignty of its payment system.
In a recent speech at Ljubljana, ECB executive board member Piero Cipollone stressed that even 25 years after the issuance and adoption of the euro across the Eurozone, the bloc still lacks a comprehensive system to tackle the ongoing digitization of the payment space.
Cipollone explains that this is one of the challenges the digital euro aims to tackle, becoming a cash stand-in for digital payments. He stated:
“By introducing a digital euro we would aim to offer a digital equivalent of cash, which preserves Europeans’ freedom to pay with sovereign money, is free for basic use, preserves privacy, fosters resilience and is accepted throughout the euro area, for any digital payment.”
In addition, he referred to the digital euro as a sort of stopgap for the rising adoption of stablecoins, enabling private payment providers and banks to “retain fees and data” and “maintain client relationships.”
Cipollone’s statements seem to resonate with remarks made by ECB President Christine Lagarde, touching on the “public good” status of money and how stablecoins risked its privatization, challenging this status.
While the digital euro is being positioned as a cash alternative, a recent report found that it has the possibility of replacing it in several scenarios, which would switch to digital payments when available.
There is still no official date for the launch and adoption of the digital euro. Nonetheless, Lagarde has stated that “if the legislature supports the proposal, we should be ready to launch,” after 6 years of development.
Read more: Digital Euro Launch Awaits EU Legislative Approval, Says ECB Chief Lagarde
Read more: ECB President Christine Lagarde Warns Stablecoin Adoption Might Lead to ‘Privatization of Money’