Piero Cipollone, ECB Executive Board member, discusses the importance of preserving monetary sovereignty amid geopolitical and technological challenges, emphasizing the euro’s role and dependencies in payments and finance.
Piero Cipollone, Member of the Executive Board of the European Central Bank (ECB), delivered a speech at the Accademia Nazionale dei Lincei on the topic of Europe and monetary sovereignty.
He highlighted that preserving monetary sovereignty has been a key objective of the euro and the ECB’s role in supporting Europe’s independence. Cipollone emphasized that losing control of money equates to losing control of economic destiny and sovereignty.
The speech outlined the importance of central bank money, which is backed by the sovereign and provides a monetary anchor. Maintaining the relevance of the euro for retail and wholesale transactions is essential for monetary sovereignty, supported by sound macroeconomic policies and strong foundations of trust and resilience.
The transformation of payment and financial systems due to digitalisation presents new challenges. Cipollone stressed the need for Europe to lead this transformation to avoid excessive dependencies, especially in digital retail payments and digital finance.
He discussed dependencies in digital retail payments, where most transactions rely on foreign solutions and international card schemes. The ECB plans to issue a digital euro to ensure a European digital payment option, supporting market competition and reducing reliance on international schemes.
In digital finance, the ECB is preparing to issue tokenised central bank money for settlement on distributed ledger technology (DLT), aiming to protect Europe’s monetary sovereignty and foster a pan-European digital finance ecosystem through projects like “Pontes” and “Appia”.
Regarding global payments, Cipollone noted the euro’s international role and the risks posed by US dollar-denominated stablecoins. The ECB is expanding links between TARGET Instant Payment Settlement (TIPS) and other fast payment systems worldwide to improve cross-border payment efficiency and reduce reliance on third currencies.
The speech also addressed the need to support innovative European companies through better access to domestic funding, reducing reliance on US venture capital, and establishing a harmonised legal framework for digital assets.
Finally, Cipollone emphasized that addressing dependencies enhances economic resilience, efficiency, and competitiveness, reinforcing Europe’s monetary sovereignty and supporting a stronger, integrated European market.
He concluded by calling for bold steps to reduce reliance on external solutions in payments and finance, ensuring Europe’s independence and stability in an uncertain world.
