Digital Euro Study Suggests ECB May Need to Protect Against Stablecoin Competition

A recent study by Frankfurt-based legal scholar Thomas Weck has found that the introduction of the digital euro is permissible under EU law. The European Central Bank (ECB) aims to create a digital form of the euro that can be used online and offline, complementing but not replacing cash.

Weck's study examines whether the ECB is conducting monetary policy with the digital euro or competing with private payment providers. He concludes that the issuance and use of the digital euro are part of monetary policy and do not constitute business activities.

The study also finds that European lawmakers may be obligated to protect the role of the euro and the effectiveness of monetary policy in response to growing competition from private stablecoins and digital payment systems operated by large technology companies.

The EU institutions aim to conclude the legislative process by the end of 2026, with the ECB potentially starting to issue the new digital currency in 2029. The project has received support from Deutsche Bundesbank, with Lutz Lienenkämper advocating for closer integration of the digital euro with existing European payment solutions.