Piero Cipollone of the ECB updates the European Parliament on the progress of the digital euro, including legislative and technical developments, strategic importance, and privacy protections.
Piero Cipollone, Member of the Executive Board of the European Central Bank, provided an update on the digital euro during a session with the Committee on Economic and Monetary Affairs of the European Parliament.
He stated that progress is being made on legislative and technical preparations, bringing the digital euro closer to implementation. The EU Council aims to agree on its general approach to draft legislation by the end of the year, with the European Parliament working to define its position.
The euro area leaders emphasized the strategic importance of the digital euro at the October Euro Summit, urging swift legislative completion and preparatory steps. The ECB’s Governing Council has moved to the next phase of the project to ensure technical readiness.
Cipollone addressed key questions about the digital euro, including its necessity, impact on banks, relationship with cash, and privacy concerns. He explained that the digital euro aims to extend cash benefits to digital payments, address market fragmentation, and preserve monetary sovereignty. It will be built on European infrastructure, managed by EU-controlled providers, and complement physical cash without replacing it.
Regarding banks, the digital euro will be distributed through banks, allowing them to maintain their business models and benefit from reduced costs and increased payment service offerings. The project is designed to avoid disintermediation and will involve capped holdings and a link to commercial bank accounts.
The digital euro will not replace cash but will serve as a complementary digital payment option, with ongoing work to ensure cash remains available and accepted across the euro area. The ECB is committed to the future of cash, including ongoing euro banknote redesigns and strengthening legal tender status.
Privacy protections include offline functionality for cash-like privacy, encryption and pseudonymisation for online payments, and strict data access rules. The system will be supervised by independent data protection authorities, and the digital euro will not be programmable or used for surveillance. Usage will be voluntary, with physical cash remaining an option.
Delivery depends on legislative and technical readiness. Legislation will ensure accessibility and acceptance, while technical development is focused on capacity building. The final decision on issuance will follow legislative adoption, with pilot transactions possible from mid-2027 and potential issuance in 2029.
Cipollone concluded that the digital euro is a vital step to ensure central bank money remains relevant in a digital world, enhancing Europe’s resilience, autonomy, and economic security. The ECB will continue supporting legislative progress and provide updates, with additional materials published for transparency.
