Piero Cipollone of the ECB discusses the digital euro, its importance, benefits for consumers, merchants, and the role of European infrastructure in enhancing payment resilience and autonomy.
Piero Cipollone, Member of the ECB Executive Board, presented the digital euro project to the Italian Parliamentary Committee of Inquiry into the Banking, Financial and Insurance System. He emphasized the importance of democratic legitimacy and political scrutiny for currency projects.
The presentation highlighted Europe’s need to strengthen its independence amid geopolitical tensions by building a competitive economy. The ECB’s mandate includes issuing central bank money and ensuring the smooth operation of payment systems.
Currently, the ECB is modernizing wholesale payments and improving cross-border transactions through initiatives like Pontes and Appia, which aim to settle transactions on distributed ledger technology (DLT) in central bank money. Progress includes plans to launch Pontes in the third quarter of this year.
Europe’s reliance on non-European solutions for online and cross-border payments poses risks. The digital euro is seen as a way to enhance sovereignty, especially as cash usage declines and digital payments grow. The digital euro would serve as a digital equivalent of cash, ensuring trust, safety, and privacy, with offline functionality for resilience.
The digital euro would benefit consumers by offering a simple, universally accepted, and free digital payment method, usable online and offline, with privacy protections. It would also support inclusion for vulnerable groups, with collaborations to ensure universal access.
For merchants, the digital euro could reduce dependence on international card schemes, lowering fees and increasing negotiating power. It would enable instant payments and offline transactions, benefiting small and large merchants alike.
Banks and payment service providers would remain central, with the digital euro distributed through supervised intermediaries. It would not remunerate holdings or threaten financial stability, and linking wallets to bank accounts would facilitate seamless payments.
The project is progressing both technically and legislatively, with preparations underway and legislative agreements, including the European Union’s proposed digital euro regulation, which preserves key features like legal tender status and offline functionality.
Public-private cooperation is vital. The digital euro would create a shared European payment infrastructure, enabling private providers to operate on a common standard, scale faster, and innovate. Early benefits include readiness of payment terminals and increased market reach.
European leaders have called for swift legislative action to avoid dependence on non-European solutions and to capitalize on the benefits of the digital euro. The ECB emphasizes that the time to act is now to protect the currency and ensure Europeans’ freedom to pay.
