ECB's Cipollone highlights digital euro's strategic importance

Piero Cipollone, Member of the Executive Board of the European Central Bank, clarified that the digital euro is not primarily a defensive measure, but an adaptation to evolving payment habits and a fragmented European system.

The ECB is mandated to ensure smooth payment systems and provide payment means, a need not fully met by cash in the digital age.

Cash transactions in value terms declined from 40 percent in 2019 to 24 percent in 2024, highlighting the gap in digital central bank money.

Cipollone emphasized that the digital euro aims to complement banknotes and coins, filling the void for e-commerce and other digital transactions.

He stated that the digital euro, as a legal tender and a single, open standard, would encourage the private sector to develop pan-European payment solutions, reducing reliance on non-European providers and strengthening systemic resilience.

"It is public money in digital form," Cipollone affirmed, underscoring its role in safeguarding money as a public good and avoiding excessive dependencies.

Cipollone noted the euro area's resilience, with GDP figures potentially outperforming forecasts.

He echoed President Lagarde's assessment that the euro area is "in a good place," attributing recent positive revisions primarily to investment.

This investment supports faster growth without jeopardizing price stability, making the baseline scenario "increasingly credible.

" However, Cipollone acknowledged rising uncertainty, which could affect the recovery by posing a risk to investment.

This prolonged uncertainty would impact the real economy, particularly growth, and consequently inflation.