According to Frankfurt, the digital euro could strengthen the European monetary system, but citizens remain skeptical.
According to the latest ECB report, the digital euro could replace a significant share of physical cash and traditional bank deposits, as reported by EFE.
The central institution estimates that for every 10 euros issued in digital form, 5 euros in physical banknotes could be withdrawn from circulation, while 3 euros might migrate from conventional bank deposits. This transformation would depend on adoption rates among the public.
Frankfurt’s projections outline three different scenarios. In the most conservative case with minimal adoption, about €15 billion in cash could be replaced. The medium adoption scenario suggests €125 billion, while the most optimistic forecast points to €256 billion in physical currency being phased out.
Last January, ECB board member Piero Cipollone emphasized the strategic importance of the digital currency, presenting it as a countermeasure to the growing influence of dollar-based stablecoins in the European financial ecosystem.
Despite the ECB’s stated goal, the actual need for a digital euro remains uncertain. This uncertainty is reflected in the lukewarm interest shown by European citizens: an ECB study revealed a strong preference for traditional payment methods and widespread indifference toward the new currency. Out of a sample of 19,000 people across 11 countries, only a small portion hypothetically allocated funds to the digital euro, favoring instead cash and conventional bank accounts.
