ECB’s Schnabel Urges Digital Euro to Counter Stablecoin Risks and Anchor Payments

The European Central Bank’s best response to the rise of stablecoins is to create a digital euro, ECB Executive Board member Isabel Schnabel said, arguing that public money must remain the anchor of the payments system. Her remarks, reported by Bloomberg, come as policymakers in Europe and the United States increasingly view stablecoins as a force that could reshape both financial stability and the reach of central-bank policy.

Schnabel said stablecoins pose risks to financial stability and monetary policy, and that the ECB should ensure “public money remains the anchor of the system,” according to Bloomberg’s reporting. The argument aligns with the ECB’s broader digital euro project, which the central bank says would be a digital form of cash issued by the ECB and available across the euro area.

The digital euro has been framed by ECB officials as a way to preserve monetary sovereignty in a payments landscape that is becoming more digital and more dependent on private or non-European providers. The ECB says the project is intended to complement cash, provide a secure and private electronic payment option, and give people a central-bank-backed means of payment for everyday use.

The timing is significant because stablecoins are gaining attention not only in Europe but also in the United States. On the same day, Federal Reserve Governor Christopher Waller said stablecoins could broaden the reach of U.S. monetary policy if they spread internationally, underscoring how central banks see digital tokens as potentially affecting the global role of their currencies.

For Europe, the debate has practical as well as strategic implications. ECB materials say the digital euro could help reduce reliance on non-European payment systems and support resilience in a market where digital payments are increasingly dominant. Supporters argue that a public digital currency would give consumers a widely accepted, free-of-charge payment option while reinforcing the euro’s role as the core unit of account and settlement in the region.

The ECB has already moved the project forward: its Governing Council decided in October 2025 to continue preparations for the digital euro, and the bank says it is working toward possible readiness for a first issuance in 2029 if EU legislation is adopted. That means Schnabel’s comments add urgency to a debate that is already moving from concept to implementation, with lawmakers and central bankers now deciding how far and how fast Europe should go in building a public alternative to privately issued digital money.