In a speech delivered in Rome, ECB Executive Board member Piero Cipollone argued that rapid technological change is transforming money and payments, making it essential for central banks to modernise central bank money. He warned that without action, Europe risks fragmentation, weaker monetary sovereignty and growing dependence on non-European payment providers and dollar-based stablecoins.
Cipollone outlined three key challenges: fragmented retail payments in Europe, the rise of tokenisation and distributed ledger technology without central bank money at their core, and slow, costly cross-border payments. To address these, the Eurosystem’s strategy rests on three pillars: the complementarity of public and private money, close cooperation with market participants, and strict technology neutrality.
He highlighted three major initiatives. First, the potential introduction of a digital euro as a digital form of cash, designed to complement physical banknotes, strengthen Europe’s strategic autonomy and provide a pan-European payment solution, with a possible pilot from 2027 and first issuance around 2029. Second, the development of tokenised central bank money for wholesale markets through projects such as Pontes and Appia, enabling safe settlement of digital asset transactions in central bank money. Third, the interlinking of fast payment systems, including TIPS, to make cross-border payments faster, cheaper and more transparent while preserving monetary sovereignty.
Cipollone stressed that central bank money and private innovation are not competitors but partners: central bank money provides the risk-free anchor that allows private solutions to scale safely. He concluded that Europe faces a clear choice—either let others shape the future of money or take the lead itself—and called for joint public-private action to build an innovative, resilient and truly European digital financial system.
