Cipollone: Digital euro strengthens banks, ensures sovereignty
Piero Cipollone, Member of the Executive Board of the European Central Bank, highlighted the digital euro's potential to strengthen banks' customer relationships and ensure European payment sovereignty. He delivered his speech at the Annual Meeting of the Federation of Italian Cooperative Credit Banks.
Trust in digital cash
ECB Executive Board Member Piero Cipollone underscored the foundational role of trust in money, describing it as a social agreement that grants central bank-issued currency legal tender status.
He emphasized that this public money, guaranteed by an institution safeguarding public interest, serves as the anchor for the entire monetary system.
As payments increasingly shift to smartphones and digital platforms, Cipollone argued that "central bank money needs to keep up with this change.
If it fails to do so, it runs the risk of being marginalised.
" This imperative forms the core rationale for the digital euro project, designed to complement existing banknotes and coins with a digital form of cash.
Navigating payment shifts
Digitalization is reshaping European payments, posing challenges for commercial banks.
The rise of mobile payments means banks incur higher fees and lose valuable payment data, crucial for assessing client creditworthiness.
Europe's growing reliance on non-European payment infrastructures, processing two-thirds of euro area card payments, raises concerns about resilience and the central bank's mandate.
Cooperative banks, with their strong local ties, are especially exposed, as payment data is vital for customer relationships and risk management.
The digital euro aims to address these vulnerabilities.
Shared vision, robust future
The digital euro project offers a pragmatic solution to align the central bank's mandate with commercial banks' evolving business models.
By preserving banks' customer relationships and providing a European payment infrastructure, it addresses critical vulnerabilities in the digital economy.
This initiative is essential for maintaining trust in money and ensuring European payment sovereignty in the long term.