The European Central Bank is pushing for a digital euro to counter the rise of the US dollar stablecoins, estimated to replace the circulation of €256 billion in paper currency.

BlockBeats News, April 20th, according to the latest report from the European Central Bank (ECB), the digital euro is expected to replace some of the circulating banknotes, fundamentally changing how Europeans use currency and impacting bank deposits. Although the digital euro project aimed at promoting Central Bank Digital Currency (CBDC) has not yet been approved, the ECB has started to study its impact on the existing asset structure of the euro area (including banknotes and bank deposits).

It is estimated that for every 10 euros of digital euro issued, 5 euros of circulating banknotes could be replaced; for every 10 euros of digital euro issued, there would be a loss of 3 euros in bank deposits. If European citizens have a high level of acceptance of the digital euro, it could replace 256 billion euros of banknotes. However, even in the most optimistic scenario, the scale of digital euro usage remains limited, as the current circulation of euro banknotes exceeds 15.6 trillion euros. Europe is actively promoting the digital euro to counter the rise of stablecoins pegged to the US dollar and other cryptocurrencies. ECB Executive Board member Chiara Pronzini has previously emphasized: "The digital euro will curb the expansion of these bankless solutions, which is exactly why we need it."