Piero Cipollone, a member of the ECB Executive Committee, highlighted the connection to the digital euro on the health of sovereign payments in Europe. He also said such solutions would keep banks in a financial loop while Stablecoins would try to avoid them.
ECB defends digital euro papers as an alternative to sovereign cash
The European Central Bank (ECB) defends the emergence of Central Bank Digital Currency (CBDC) across Europe as a cash alternative to maintain the autonomy and sovereignty of payment systems.
In a recent speech at Ljubljana, ECB Executive Committee member Piero Cipollone emphasized that even 25 years after the issuance and adoption of the euro across the euro area, the bloc still has no comprehensive system to tackle the ongoing digitalization of payment space.
Cipollone explains that this is one of the challenges the Digital Euro aims to tackle: becoming a representative of cash in digital payments. He said:
“By introducing the digital euro, we aim to provide digital equivalent cash that preserves the freedom to pay with sovereign funds for Europeans. It will preserve basic usage, preserve privacy, foster resilience and be accepted throughout the Euro area for digital payments.”
Additionally, he called the digital euro a kind of halt for the increased adoption of stubcoin, allowing private payment providers and banks to “hold fees and data and maintain client relationships.”
Cipollone’s statement resonates with comments made by ECB President Christine Lagarde, and appears to touch on the status of money’s “public good” and how Stablecoins risked privatization and challenged this position.
The digital euro is positioned as a cash alternative, but a recent report found it could be replaced by several scenarios.
There is no official date for the release and adoption of the Digital Euro yet. Despite this, Lagarde said it had developed for six years, saying, “If Congress supports the proposal, we should be ready to launch.”
Read more: Digital Euro launch awaits EU legislative approval, ECB Chihragard says
Read more: ECB President Christine Lagarde warns that adoption of Stablecoin could lead to “privatization of money”