ECB's Cipollone Says Digital Euro Is a Matter of Sovereignty
Key Takeaways
- •ECB Executive Board member Piero Cipollone said the digital euro could give the euro area sovereignty over payment infrastructure that currently depends on non-European third parties.
- •The digital euro pilot next year will use real transactions conducted by ECB and national central bank staff, with 36 market operators, including seven from Italy, collaborating on preparations.
- •The ECB is inviting e-commerce and mobile-commerce operators to participate in the digital euro testing phase.
- •Cipollone previously said two-thirds of euro-area card transactions are governed by non-European companies, describing this reliance as a strategic vulnerability.
- •Formal issuance of the digital euro requires EU legislation, and Cipollone expressed hope the regulation will be adopted by the end of the year, enabling a Governing Council decision.
European Central Bank Executive Board member Piero Cipollone said the digital euro — the euro area’s planned central bank digital currency — set for a pilot next year, has the potential to give the bloc “sovereignty” over a payments infrastructure that currently depends on external, non-European third parties.
In an interview with Italy’s Milano Finance published by the central bank on Saturday, Cipollone said the bloc’s critical dependence on outside providers makes it difficult to guarantee the smooth functioning of payments. He did not cite specific third parties.
“In recent years Europe has learned that, for some essential services, we cannot rely only on third parties. We saw this with energy and we’re seeing it today with defense. And the same is true for payments,” he said.
“The smooth functioning of payment systems is one of our responsibilities. If we are critically dependent on third parties, it’s not easy to ensure this smooth functioning,” Cipollone said.
His comments coincided with new details about the project’s testing phase. The pilot will use real transactions carried out by ECB and national central bank staff, with 36 market operators — including seven from Italy — collaborating on preparations. The ECB is also inviting e-commerce and mobile-commerce operators to take part.
Cipollone stressed that sovereignty does not mean shutting third parties out. “It means having the power to choose and knowing that, for an service like payments, Europe can also rely on its own strength.”
He has made similar arguments before. In an April public lecture held in Latvia, Cipollone said Europe’s reliance on non-European payment providers creates a strategic vulnerability, noting that two-thirds of euro-area card transactions are governed by non-European companies. The digital euro, he argued at the time, could reduce that dependence and provide European-controlled payment infrastructure.
Formal issuance remains contingent on European Union legislation: the ECB Governing Council can decide on issuing a digital euro only after legislative negotiations in Brussels conclude.
“We hope that the regulation will be adopted by the end of the year, enabling the ECB’s Governing Council to issue a formal decision on issuance,” Cipollone told Milano Finance.
