Piero Cipollone of the ECB discusses the transformation of money, digital euro, tokenised central bank money, and cross-border payments to ensure stability, innovation, and sovereignty in Europe.
Piero Cipollone, Member of the Executive Board of the ECB, presented a perspective on the future of money at a roundtable at Aspen Institute Italia.
He emphasized that central banks’ core role is to issue money and protect its value, but the technological environment is changing radically, with digital payments becoming the norm and new technologies disrupting financial services.
In the euro area, the ECB and national central banks have played a key role in maintaining monetary unity through infrastructures like T2, T2S, TIPS, and ECMS, supporting the safe and efficient movement of money and assets across the region.
The ECB’s strategy includes three main initiatives: preparing for a digital euro, enabling transactions based on distributed ledger technology (DLT), and interlinking fast payment systems internationally to improve cross-border payments.
He identified three challenges: retail payments remain fragmented across Europe, the changing nature of money and payments risks undermining monetary sovereignty, and cross-border payments are slow, costly, and opaque. Stablecoins pose additional risks, potentially eroding the euro’s international role.
The ECB aims to address these issues by fostering a public-private partnership, ensuring the complementarity of public and private money, and maintaining technology neutrality. Central bank money provides a safe settlement asset and a reference point, supporting private sector innovation and reducing fragmentation.
The digital euro, expected to be issued around 2029, would be a digital form of cash, offering a European digital payment option with offline and online capabilities, supporting resilience and privacy. Banks will distribute it, and safeguards will be in place to preserve their role in credit and monetary transmission.
In wholesale markets, tokenised central bank money will support a digital assets ecosystem, enabling safer and more efficient settlement and trading. Projects like Pontes and Appia are exploring interconnected platforms and digital asset markets.
For cross-border payments, interlinking TIPS with international fast payment systems and designing the digital euro for international use aim to make transactions faster, cheaper, and more transparent, while respecting sovereignty and avoiding currency substitution risks.
In conclusion, Europe must act proactively to shape the future of money through innovation, collaboration, and safeguarding monetary stability. The ECB advocates for a resilient, integrated digital financial system centered on the euro.
