The European Central Bank (ECB) hopes that U.S. President Donald Trump’s push for stablecoins pegged to the U.S. dollar will accelerate legislative backing for the digital euro, ECB board member Piero Cipollone told Reuters.
The ECB has been working on a digital euro as a central bank-backed electronic payment method that would offer an alternative to U.S.-based providers like Visa and PayPal. Cipollone believes Trump’s support for widely available dollar-backed stablecoins highlights the need for Europe to develop its own digital currency, adding urgency to the project.
“The political world is becoming more alert to this,” Cipollone said in an interview. “And it’s possible that we will see an acceleration in the process.”
The European Commission first introduced digital euro legislation in June 2023, but progress has been slow due to skepticism from lawmakers and banking institutions. Cipollone expressed hope that the European Parliament and Council would finalize their work on the legislation before the summer, allowing negotiations with the Commission to move forward.
The goal is to have the legal framework in place by November, when ECB policymakers are expected to vote on whether to officially launch the digital currency.
“Political processes are complex and there are many things on the table,” Cipollone said. “Obviously the sooner the better, but we fully understand their needs.”
Despite Cipollone’s optimism, EU lawmaker Markus Ferber cautioned that Parliament may only have a report ready by the summer, rather than a completed legislative framework.
Concerns Over U.S. Stablecoins in Europe
A key motivation for the digital euro is concern over the growing influence of U.S. dollar-backed stablecoins in the global financial system. Like money market funds, stablecoins provide exposure to short-term interest rates in an official currency, but they can also be used for everyday payments. Cipollone warned that their widespread adoption in Europe could lead to capital outflows, shifting deposits from European banks to the United States.
“If people in Europe start to use stablecoins to pay, given that most of them are American and dollar-based, they will be transferring their deposits from Europe to the United States,” Cipollone explained.
However, European banks have also expressed concerns about the digital euro itself. They fear that customers may move their cash into ECB-backed wallets, depleting bank reserves. To mitigate this risk, the ECB has proposed limiting digital euro holdings to a few thousand euros per person and ensuring they do not accrue interest.
Global CBDC Adoption on the Rise
Central bank digital currencies (CBDCs) are already in use in several countries. Nigeria, Jamaica, and the Bahamas have launched their own digital currencies, while 44 other nations—including Russia, China, Australia, and Brazil—are running pilot programs, according to the Atlantic Council think tank.
Trump, however, has taken a different stance on digital currencies. While supporting stablecoins, he previously prohibited the U.S. Federal Reserve from issuing its own CBDC, setting the U.S. on a different path from many other major economies.
As global interest in digital currencies grows, the ECB will continue pushing for legislative approval of the digital euro, seeing it as a necessary step to ensure Europe’s financial independence in an increasingly digital economy.