European Central Bank Calls for Digital Euro to Counter US Dollar Stablecoin Influence

The European Central Bank is ramping up its warnings about the adoption of stablecoins, with a senior official advocating for a digital euro to counter the influence of US dollar-pegged stablecoins in Europe. ECB executive board member Piero Cipollone has once again expressed concerns about the rising popularity of US dollar stablecoins, suggesting that introducing a central bank digital currency (CBDC) could safeguard the monetary sovereignty of the eurozone. Cipollone emphasized the need for a digital euro to prevent foreign currency stablecoins from becoming widely used in the euro area, highlighting the risks of relying on non-European payment systems. The ECB executive stressed the importance of a public-private partnership to protect Europe's monetary sovereignty and promote the digital euro as a sovereign European payment method. Cipollone also underscored the significance of cash in ensuring financial inclusion and resilience, noting the challenges posed by the increasing preference for digital payments and online shopping in Europe.