In Frankfurt on Feb 6, ECB board member Piero Cipollone stated to Reuters that the European Central Bank hopes “U.S. President Donald Trump's plan to support cryptocurrencies pegged to the U.S. dollar will speed up legislative backing for the digital euro.”
The ECB proposed its digital currency as an electronic payment method independent of major U.S. providers like Visa and PayPal, described as “essentially an online wallet guaranteed by the central bank.”
Cipollone mentioned that Trump's endorsement of dollar-tied cryptocurrencies would prompt the development of another U.S.-made payment tool, intensifying the momentum for the digital euro.
Although the European Commission introduced digital euro legislation in June 2023, progress has been slow due to skepticism from lawmakers and bankers. Cipollone expressed hope for an expedited process as awareness in the political sphere grows.
The ECB aims for the EU Parliament and Council to finalize the digital euro legislation before summer, enabling negotiations with the Commission for implementation by November.
Cipollone raised concerns about the impact of U.S. stablecoins on European banks if they become popular for payments, stating this could lead to deposit outflows to American platforms.
To mitigate potential negative effects, the ECB indicated caps on digital euro holdings and no interest payments, addressing worries from bankers about potential deposit transfers to an ECB-backed digital wallet.
Several countries have already launched central bank digital currencies (CBDCs), with others conducting pilot programs; however, Trump has opposed the U.S. Federal Reserve from issuing its CBDC.