ECB Executive Board member Piero Cipollone used a speech to Italy’s cooperative credit banks to make one of the sharper central bank cases for the digital euro as a defense against stablecoin encroachment. Speaking at the annual meeting of Federcasse, he argued that stablecoins and mobile payments both erode banks’ visibility into transactions and their fee income. The digital euro, by contrast, would preserve both.
The digital euro would retain the transactional visibility banks need for credit decisions and preserve at least some fee income, Cipollone argued. The current draft legislation prevents the digital euro from paying interest and imposes holding limits, moderating the risk of deposit flight.
“Public money does not serve any single private interest, and no-one can use it to impose terms in their favour on the citizens that hold it,” he said. “A euro is a euro wherever it is spent, and it is guaranteed by an institution whose actions are designed to safeguard the public interest.”
Most central banks are not keen on stablecoins for various reasons. Cipollone’s reference to “single private interest” touches on a topic that has received less attention of late, but that is about to change.
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