ECB’s Cipollone: Pursuing Technical Work on Digital Euro Development, Financial Stability, Privacy

14 February 2024

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Piero Cipollone on Wednesday said that the ECB was continuing to pursue technical work on a digital euro.

In a speech at the Committee on Economic and Monetary Affairs of the European Parliament in Brussels, Cipollone, according to a text provided by the ECB, said that the ECB had invited companies that could devise a platform and the necessary infrastructure for a digital euro to submit applications to establish framework agreements.

‘Let me be clear: we are not launching any of the development work now’, he said. Rather, if the decision to launch the digital euro is taken, authorities ‘need to be prepared for such an event.’

‘Our readiness would be compromised if we started searching for possible suppliers only after that decision is made’, he added.

The ECB was also preparing a draft rulebook that would ‘define a single set of rules, standards and procedures for the digital euro that will ensure its harmonious implementation’, he said.

So as to protect financial stability from possible effects of a digital euro, it was necessary for the latter to be a means of payment rather than an investment vehicle, and for the role of financial intermediaries to be preserved, he said.

‘We have just started to develop the analytical framework and models that would be used to determine the holding limit’, he said. ‘This limit will be set to preserve financial stability, having considered the impact on different bank business models and on monetary policy transmission and implementation.’

Finally, the ECB was conscious of people’s privacy concerns, he said. ‘On our side, we are determined to not only protect but enhance privacy in payments’, he said.

The ECB was ‘determined’ to continue making cash payments possible, he said. ‘We will continue to do everything in our power to ensure people can continue to have the option to pay with it’, he said. ‘They value this option, and we are committed to maintaining it for them.’

Use of the digital euro would not require being online, he reminded. The Eurosystem would not know who was behind a payment, he said.

‘We would only see a minimal set of pseudonymised data necessary to fulfil Eurosystem tasks, such as settlement’, he said.