Digital euro strengthens Europe's payments ecosystem and strategic autonomy
Piero Cipollone, Member of the ECB's Executive Board, advocated for the digital euro at an event in Nicosia on February 6, 2026. He emphasized its role in strengthening Europe's payments ecosystem, monetary sovereignty, and strategic autonomy.
Safeguarding Europe's digital sovereignty
ECB Executive Board Member Piero Cipollone emphasized the critical need for a digital euro to secure Europe's monetary sovereignty amidst accelerating digitalization.
He highlighted the declining use of physical cash and the growing reliance on non-European payment providers, which handle nearly two-thirds of euro area card transactions.
This dependence creates significant vulnerabilities in critical payment infrastructure, impacting Europe's economic stability and strategic autonomy.
While wholesale initiatives like Pontes and Appia are advancing to provide euro-denominated DLT settlements, Cipollone stressed the immediate pressure on the retail payment sector.
The digital euro is positioned as a vital complement to physical cash, designed to fill a structural gap by ensuring central bank money remains available and trusted in an increasingly digital economy.
A win-win for users and providers
The digital euro promises tangible benefits for consumers, merchants, and payment service providers.
Consumers would gain a simple, convenient, and universally accepted digital payment solution, free for basic use, offering offline functionality and privacy comparable to cash.
Merchants would benefit from a European alternative to international card schemes, potentially reducing high and non-transparent fees.
Payment service providers, including banks, would remain central to distribution, avoiding disintermediation.
A compensation model ensures banks benefit from payments shifting to the digital euro, while holding limits mitigate risks of excessive deposit outflows, preserving financial stability.
Necessary, but not without hurdles
The push for a digital euro is a critical step to address Europe's payment vulnerabilities and maintain monetary sovereignty in a digital age.
However, significant challenges remain in achieving broad public and merchant adoption, especially given privacy concerns and the complexity of integrating a new payment rail.
Its ultimate success hinges on overcoming these practical hurdles and demonstrating clear, tangible benefits beyond geopolitical considerations.