ECB’s Cipollone Says Digital Euro to Give Banks Competitive Edge

The digital euro will help European banks to better compete, according to European Central Bank Executive Board member Piero Cipollone.

Speaking to an MNI Connect webcast on Tuesday, the Italian said that the whole project isn’t just intended to fix shortcomings in the payments landscape.

“It is also an opportunity to think about the future and provide a platform to innovate,” he said. “New opportunities are emerging, and we want to make sure that European payment service providers are fully equipped to seize them and gain a strong competitive edge.”

The ECB plans to roll out a digital version of the euro in 2029, following a pilot phase starting next year. The project is aimed at securing monetary sovereignty amid concerns about Europe’s reliance on US payment firms like Visa and Mastercard, as well as the emergence of dollar-pegged stablecoins.

“If we do not provide a digital form of cash, the role of public money may continue to decline,” Cipollone said. “We may find ourselves trapped in a situation where there is no pan-European digital payment solution that caters to every type of day-to-day transaction.”

He also reiterated that the introduction of the digital euro won’t threaten the resilience of Europe’s financial system.

“Holding limits are effective in containing deposit outflows and safeguarding financial stability,” he said. “The digital euro is therefore not designed to disintermediate banks. It is designed to safeguard their role as the monetary system becomes increasingly digital.”

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