By David Barwick – FRANKFURT (Econostream) – European Central Bank Executive Board member Piero Cipollone on Wednesday said the digital euro could help ensure Europe’s “resilience and autonomy in payments” in what he called a “fragmenting world.”

Speaking in Riga at an event hosted by the Stockholm School of Economics in Riga and Latvijas Banka, Cipollone said Europe needed “to reduce our existing dependencies in payments – and avoid creating new ones – to ensure our economic resilience and strategic autonomy.”

Cipollone said “dependence on a non-European infrastructure leaves users vulnerable to an outright withdrawal of access” and warned that Europe remained heavily reliant on non-European providers in day-to-day payments.

“The most obvious indication of our dependence on non-European payment systems for day-to-day transactions is the exceptionally high level of foreign card penetration,” he said.

He said the digital euro was the Eurosystem’s answer to that problem.

“The digital euro is the Eurosystem’s response to this structural gap,” he said.

Cipollone said the digital euro “will reduce Europe’s excessive dependence on non-European providers” and “will ensure that Europeans can pay with their money – the sovereign money issued by their central bank – in the digital economy, just as they can with cash in the physical economy.”

He also said the digital euro “is designed for continuity and will prevent disruption” and said its offline functionality would allow it to be used “even without an internet connection, a phone signal or access to a functioning ATM.”

According to Cipollone, the Eurosystem “will not charge scheme or processing fees for digital euro transactions,” which he said would reduce costs for merchants and payment service providers.

He also referred to the Eurosystem’s “comprehensive payments strategy,” published on Tuesday, and said that “[f]rom September, we will offer tokenized central bank money as part of our Pontes project.”

Cipollone said the next steps for the digital euro were for EU legislators “to complete the legislative process” and for the Eurosystem “to prepare the pilot and get ready for issuance from a technical standpoint.”

“In an increasingly fragmented world, the integrity and independence of Europe’s payment infrastructure is a matter of monetary sovereignty,” he said. “And the time to act is now.”