Piero Cipollone, ECB Executive Board member, comments on the European Parliament’s support for the digital euro, its privacy features, pilot plans, costs, and its role in Europe’s financial infrastructure.
Piero Cipollone, Member of the Executive Board of the ECB, discussed the European Parliament’s recent vote backing the digital euro, which received nearly 70% support. He emphasized the legitimacy this provides and the democratic process involving stakeholders such as merchants, citizens, banks, and external central banks.
Cipollone addressed concerns about privacy, stating the digital euro will offer offline privacy comparable to cash and encrypted online transactions, with only the payer and payee knowing the details.
He explained that the digital euro is both a technical response to evolving payment needs—particularly online transactions—and a geopolitical measure to ensure European control over payment infrastructure, reducing reliance on non-European systems.
The pilot, starting in September 2027, will involve merchants, banks, and ECB and national bank employees, with over 50 applications received and 36 selected participants, including French providers BPCE and Worldline.
The business model will involve the ECB and national central banks setting rules without collecting scheme or transaction fees, creating potential savings for merchants and banks. Merchants will be required to accept the digital euro, with fee caps protecting them.
Regarding cybersecurity, the ECB leverages extensive experience from existing payment systems like T2, which processes transactions equivalent to the euro area’s annual GDP every eight days, all meeting high security standards.
Estimated development costs for the digital euro are around €1.3 billion, with annual operating costs approximately €320 million. These costs are expected to be offset by seigniorage revenues. Banks’ preparation costs over four years are manageable, representing up to 3.4% of their annual IT budgets.
The digital euro differs from solutions like Wero by being central bank money, accepted across Europe, and usable offline and online. It will support existing payment solutions, expand acceptance, and reduce transaction fees, benefiting consumers and merchants.
Finally, Cipollone commented on the ECB’s upcoming monetary policy meeting, explaining that current inflation is driven by energy shocks, notably oil prices. The ECB aims to prevent second-round effects—wage and price spiral—by maintaining inflation expectations anchored at 2%, ensuring inflation returns to target over the medium term.
