Protecting the Eurozone Against Dollar-Backed Stablecoins

Cipollone stressed the need to limit the widespread use of foreign currencies in the region, especially US dollar stablecoins. Launching a central bank digital currency (CBDC) would help prevent such foreign assets from becoming common payment tools in the eurozone.

“A digital euro could reduce the risk of foreign stablecoins gaining ground as everyday payment methods in Europe,” Cipollone stated in an official publication on the ECB’s website.

A Public-Private Collaboration for Sovereignty

The ECB official also warned that overreliance on foreign payment systems — including global card networks and stablecoin issuers — poses a risk to Europe’s autonomy in monetary affairs.

“We need a public-private partnership to maintain control. The digital euro, based on European legislation, would be a sovereign payment method and the foundation of this collaboration,” he explained.

The Challenge of Cash in a Digital Era

While Cipollone reaffirmed the importance of cash as the cornerstone of Europe’s financial system, he acknowledged its limitations in the digital economy.

“Cash remains our only sovereign means of payment, but it can’t be used online. This often forces consumers to rely on non-European payment systems, especially in e-commerce, which now accounts for a third of all retail transactions,” he said.

“Now Is the Time to Act”

The ECB board member warned of the risks of inaction, urging fast progress on regulations regarding both the digital euro and cash’s legal tender status.

“If we fail to act now, we risk losing not only control but also a critical opportunity to strengthen our financial resilience.”

Consumer Concerns Still Linger

Despite the ECB’s commitment, many European citizens remain skeptical of the digital euro. A working paper published in March revealed that most consumers see little added value in a CBDC and have serious privacy concerns.

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