The ECB warns that the decline in cash usage and emergence of private currencies threaten Europe’s monetary sovereignty. A digital euro is crucial to maintaining control over monetary policy as digital alternatives grow, ensuring public access to central bank-issued money.

With the rise of stablecoins reducing the ECB’s influence in financial stability, a state-backed digital euro aims to provide a secure alternative to foreign payment systems. This move strengthens Europe’s economic autonomy, countering the vulnerabilities posed by reliance on external digital platforms.