Monetary sovereignty at risk from digital payment dependencies

Piero Cipollone defined monetary sovereignty as ensuring the currency's relevance and maintaining control over financing conditions in the economy.

He argued that the euro has significantly strengthened Europe's sovereignty by pooling national attributes, thereby fostering peace and unprecedented economic growth.

The euro, as the second most important currency globally, enhances the euro area's resilience against foreign shocks and supports the effective transmission of monetary policy.

Cipollone highlighted the ECB's readiness to broaden access to its repo lines to counter global fragmentation, further solidifying the euro's domestic and international role.

Cipollone highlighted new challenges from geopolitical and technological shifts, specifically excessive dependencies in digital retail payments.

He noted that two-thirds of euro area card transactions rely on non-European schemes, with many countries lacking domestic alternatives.

This reliance risks resilience, leads to a loss of fees and data to foreign providers, and could be exploited as leverage.

The speech underscored the urgency of developing European solutions, such as the digital euro, to complement physical cash and ensure control over daily payments in the digital era.