Piero Cipollone of the ECB discusses the impact of digitalization on money, retail and wholesale payments, and the ECB’s strategies including digital euro, tokenization, and cross-border payment interlinking.
Piero Cipollone, Member of the Executive Board of the European Central Bank (ECB), delivered a speech at the Istituto Affari Internazionali discussing the evolution of money in the digital age.
He emphasized that central banks’ mandate to issue and safeguard money remains unchanged, but the technological environment has transformed how money is used and managed.
The speech highlighted the importance of adapting central bank money to technological developments to maintain its stability, trustworthiness, and usability. Failure to do so could diminish the role of public money and increase financial system instability.
The ECB’s approach focuses on modernizing payment systems through three main pillars:
The digital euro aims to complement cash, not replace it, and will be accessible online and offline, with legal tender status and common standards for acceptance across Europe. Regulatory approval is expected in 2026, with initial transactions possible by mid-2027 and issuance in 2029.
Regarding wholesale transactions, the ECB is exploring tokenization of financial assets, including the use of tokenized central bank money to ensure risk-free settlement and market confidence. The Pontes project will enable settlement of tokenized assets in central bank money from the third quarter of this year.
The ECB is also working on connecting market DLT platforms to existing TARGET services to facilitate tokenized asset settlement, with a comprehensive blueprint expected in 2028. These efforts align with European regulatory reforms to support tokenization and digital assets.
On cross-border payments, the ECB supports interlinking fast payment systems across countries to reduce delays, costs, and opacity. The existing TIPS infrastructure already supports instant payments in multiple currencies, and further interlinking aims to enhance international payment efficiency while safeguarding monetary sovereignty.
In conclusion, the ECB aims to preserve trust and stability across all payment domains by modernizing central bank money and supporting private sector innovation, ensuring that public money remains a reliable anchor in the evolving digital economy.
