European Central Bank (ECB) chief executive Fabio Panetta has delivered remarks on the path towards a digital euro and voiced criticism over private providers taking wing in the digital asset class.

With PayPal recently launching a US dollar stablecoin, Panetta said that the company would have “no incentive” to limit take-up of its stablecoins or the range of services they provide.

“While the market entry of BigTechs or other large payment providers may initially promote innovation, competition could be severely hampered if they attain a monopolistic position, as we have seen in other digital sectors,” he explained.

Panetta said that despite ECB’s continued considerations around a digital euro, cash is here to stay, adding that the digital euro represents “an opportunity, not a risk, for the European financial sector”.

“We are designing it as a safe payment tool in order to preserve the role of public money – that is, money backed by the state – while balancing innovation in payments with the stability of the financial sector and guaranteeing privacy,” he said.

Commenting further on PayPal’s US dollar stablecoin, Panetta noted that the company has “no public plan to roll out a similar stablecoin in Europe”.

Upon PayPal’s stablecoin launch, Dan Schulman, president and chief executive of PayPal said: "Our commitment to responsible innovation and compliance, and our track record delivering new experiences to our customers, provides the foundation necessary to contribute to the growth of digital payments through PayPal USD."

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