The European Central Bank expects the digital euro to remain the primary public payment instrument in Europe, even as euro-denominated stablecoins expand next year, Executive Board member Isabel Schnabel said in a new Bloomberg interview published on 8 December 2025. According to Schnabel, stablecoins will play a larger role in cross-border payments, but she does not foresee them displacing the digital euro within the euro area.
Schnabel noted that the financial sector is undergoing a “fundamental transformation” driven by tokenisation, with dollar-based stablecoins still dominating global markets. She welcomed the emergence of euro-backed alternatives, calling their rise “a good thing,” yet stressed that they introduce financial stability and monetary sovereignty concerns.
Digital euro positioned as Europe’s primary retail payment tool
The ECB views the digital euro as the payment instrument that will be “dominant” for everyday retail use in Europe. Schnabel said a stablecoin, particularly one pegged to the US dollar, is unlikely to gain widespread domestic payment usage, reaffirming the ECB’s long-standing sovereignty argument for issuing a central-bank digital currency.
Her remarks come as the ECB advances technical preparations for the digital euro and as lawmakers continue to debate the regulatory framework. Earlier coverage from Digital Euro News highlights that the Eurosystem has already completed its two-year preparation phase and expects legislative action in 2026, with pilot testing to follow once the legal basis is in place.
Stablecoins seen as useful for cross-border payments
Schnabel acknowledged that stablecoins may offer efficiency benefits in cross-border transfers, an area where today’s systems remain costly and slow. This aligns with growing industry interest in tokenised payment rails and programmable money, particularly as private-sector initiatives accelerate. However, she emphasised that stablecoins introduce risks tied to reserves, governance and financial stability, requiring careful regulatory oversight.
Implications for Europe’s digital-money landscape
Schnabel’s comments suggest the ECB is positioning the digital euro as a bedrock of Europe’s monetary system, even as it accepts coexistence with regulated stablecoins. For policymakers, the interview reinforces concerns that leaving digital payments entirely to foreign private issuers could weaken the euro’s international role.
As legislative negotiations continue, the ECB is signalling that while innovation in stablecoins is welcome, only a central-bank-issued digital euro can guarantee neutrality, safety and universal acceptance.