Cash can't keep up with digital demand, ECB says in push for digital euro

With cash use shrinking and digital payments on the rise, the European Central Bank thinks a digital euro might be needed to keep public money in play.

As Europe swipes, taps, and clicks its way through daily life, the European Central Bank says old-school cash can’t keep up, and a digital euro might be the answer. In a speech at the France Payments Forum event, ECB executive board member Piero Cipollone publicly acknowledged that “in the digital age, cash alone cannot do the job.”

Cipollone explained that while cash will remain available, its use has fallen as consumers increasingly turn to private digital options lately. Private payment services “are convenient, but they don’t serve all public interest objectives,” Cipollone said, adding that a digital euro “would ensure that people have a choice and don’t become dependent on a few dominant providers.”

The ECB has been consistently arguing that a digital euro could help strengthen Europe’s monetary sovereignty. In late April, for instance, a senior French central banker warned that U.S. policy shifts promoting stablecoins could erode European monetary sovereignty in the absence of a digital euro.

Cipollone in his recent speech noted that while a digital euro would not replace cash, it would “complement” it, ensuring that central bank money remains relevant in a digital world.

He also stressed that the digital euro would be designed to protect privacy, stating that a digital euro “would never be programmable money.” The ECB would not set limits on how people could spend it, Cipollone added. Though still in the works, the ECB expects the digital euro to be accessible “at any time and for everyone,” but the exact launch date is still up in the air.