ECB Vows to Keep Cash Amid Digital Euro Push, Warns of Stablecoin Dominance

The European Central Bank is doubling down on cash even as it prepares for a digital euro. Executive Board member Piero Cipollone emphasized that physical banknotes will remain central to payments, calling them "indispensable" for transactions and value storage. The digital euro, he clarified, WOULD complement rather than replace cash—both enjoying full legal tender status.

Behind the ECB's balancing act lies a growing threat from private stablecoins. Cipollone warned that without a public digital currency, dollar-pegged stablecoins could dominate cross-border payments. April remarks revealed the ECB views the digital euro as critical to curbing foreign stablecoin adoption in Europe.

Market data confirms the urgency. Stablecoin transaction volumes continue climbing, particularly for everyday purchases and international transfers. Most remain tethered to the U.S. dollar, creating what ECB officials see as an untenable dependency on private, non-European payment rails.