Cipollone outlines strategic case for a digital euro

Europe's retail payments landscape is currently dominated by non-European card schemes, with nearly two-thirds of euro area card transactions processed by international providers.

In 15 out of 21 euro area countries, there is no significantly used domestic solution for digital payments in shops.

This reliance on external infrastructure highlights an urgent need to preserve the resilience and strategic autonomy of Europe's critical payment systems.

The digital euro aims to address this by offering an additional, pan-European way to pay, complementing cash and ensuring public money remains accessible as payments increasingly move online.

It is envisioned as a digital form of cash, providing freedom of choice for consumers across all payment situations, both online and offline.

The digital euro is designed to be a win-win for consumers, merchants, and payment service providers.

Consumers would benefit from freedom of choice, robust privacy and data protection, and an inclusive and accessible digital payment method, available even in cases of limited connectivity or power outages.

Merchants could see lower fees and stronger negotiation power, particularly for small businesses, alongside instant receipt of funds.

Payment service providers would maintain client relationships and receive fair remuneration through a compensation model, with domestic solutions gaining pan-European reach without heavy investment.

The Eurosystem plans a 12-month pilot, starting in the second half of 2027, involving real-world transactions and testing four use cases, including online and offline person-to-person and person-to-business payments, to fine-tune its design and ensure technical readiness.