ECB’s Cipollone Says Digital Euro Needed to Safeguard Autonomy, Extend Cash Benefits to Online Payments

17 November 2025

By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Piero Cipollone said Monday that the digital euro is essential to preserving monetary sovereignty and ensuring that central bank money remains usable in an increasingly digital economy.

Cipollone, who addressed the European Parliament’s Economic and Monetary Affairs Committee, said Europe’s payment landscape remained fragmented and heavily reliant on non-European providers.

He said the ECB was moving ahead with both legislative and technical preparations and had entered a new phase of project work to ensure readiness for potential issuance. EU lawmakers are aiming to finalize their positions on the legislative package by year-end, he said.

According to Cipollone, the core rationale is that “we need a digital euro” to extend the benefits of cash to online payments. Europeans could not currently use sovereign money in digital transactions, which limited consumer choice and increased costs for merchants.

He warned that Europe’s dependence on international card schemes created a strategic vulnerability. Two-thirds of euro area card transactions were settled by such schemes, he said, and 15 of 20 euro area countries lacked widely used domestic digital payment solutions.

The digital euro would offer a European alternative built on European infrastructure and would complement physical cash rather than replace it, he said. Work on the next generation of euro banknotes underscored the ECB’s commitment to cash, he said.

Cipollone also argued that the project would preserve banks’ business models. The instrument would be distributed through banks, would not be remunerated, and would be subject to holding limits to avoid destabilizing deposits. Technical assessments showed no threat to financial stability, he said.

He added that banks could gain from lower scheme and settlement costs and from stronger negotiating power vis-à-vis international card networks. The digital euro’s open acceptance network would also help private initiatives scale up across borders, he said.

Addressing privacy concerns, Cipollone said the digital euro would “offer cash-like privacy” in offline mode, with transaction details known only to payer and payee. For online payments, the Eurosystem would not be able to identify transacting parties, he said, as data would be pseudonymized and encrypted.

He emphasized that the digital euro would not be programmable money and that nobody would be required to use it. Anti-fraud and anti-money-laundering checks would remain the responsibility of banks, he said.

Cipollone said legislative decisions would determine mandatory distribution and legal-tender status, which were crucial to ensuring universal acceptance. Technical work would focus on building the capacity needed for potential issuance.

If lawmakers adopt the regulation next year, pilot operations could begin in mid-2027, with first issuance possible in 2029, he said.

He concluded that the digital euro would strengthen Europe’s strategic autonomy, reduce reliance on non-European payment providers, and ensure that central bank money continues to serve citizens in both physical and digital form.