The European Central Bank (ECB) has confirmed that traditional banknotes and coins will remain part of Europe’s payment system, even as work continues on a digital version of the euro.
In a blog post published on August 4, ECB Executive Board member Piero Cipollone explained that the digital euro is being designed to work with, not instead of, physical currency.
He said, “And rest assured: a digital euro will not replace banknotes and coins but rather complement them”.
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Cipollone added that giving people access to both forms of money supports Europe’s ability to manage its own financial system without relying on foreign technology or providers.
The ECB’s goal is to provide a central bank digital currency (CBDC) that can serve as a reliable alternative to stablecoins, many of which are linked to non-euro currencies.
Cipollone stated on April 8 that without a digital euro, foreign-backed tokens could become more widely used in Europe, which might reduce the ECB’s control over payments and limit future opportunities.
At the same time, Cipollone said physical euros continue to play a valuable role, especially during situations when digital systems fail or are unavailable. He stressed that in times of crisis, having access to cash becomes essential.
He also said the ECB wants to make sure that people across the eurozone can use coins, banknotes, and digital euros, however they prefer.
Recently, ECB adviser Jürgen Schaaf cautioned that a CBDC will not be enough to compete with the rising use of US dollar-backed stablecoins. Why? Read the full story.
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