Digital euro to strengthen Europe's payments ecosystem
ECB Executive Board Member Piero Cipollone highlighted the digital euro as a crucial tool to strengthen Europe's payments ecosystem. Speaking in Nicosia, he emphasized its role in safeguarding monetary sovereignty and fostering innovation.
The case for digital cash
Piero Cipollone, Member of the Executive Board of the ECB, stressed the urgency of the digital euro project, noting Europe's increasing reliance on non-European payment solutions.
He highlighted that almost two-thirds of card-based transactions in the euro area are processed by international companies, with some countries, including Cyprus, entirely dependent on them for in-store payments.
This creates a structural gap where central bank money remains confined to physical cash, despite the economy becoming increasingly digital.
Cipollone emphasized that while the ECB will continue to issue banknotes and ensure cash availability, it must also adapt to evolving technologies.
He stated, "We need to make sure central bank money remains fit for a digital world and thereby safeguard Europe's monetary sovereignty in a digital world.
" The digital euro is designed to complement physical cash, ensuring central bank money remains available and usable in an increasingly digital economy, thereby upholding its role as a trusted anchor of the monetary system.
A win-win for Europe's payments
The digital euro offers tangible benefits for consumers, merchants, and payment service providers.
For consumers, it promises a single, convenient, and universally accepted payment solution, free for basic use, with offline functionality ensuring privacy comparable to cash.
A Eurosystem survey showed 66% of Europeans were interested.
Merchants, often burdened by high and non-transparent fees from international card schemes, would gain a European alternative, potentially halving costs for small businesses.
Payment service providers, particularly banks, are central to its distribution, ensuring they remain the primary interface for users.
A compensation model ensures banks benefit as payments shift to the digital euro, which avoids scheme or settlement fees.
Strategic imperative, not just convenience
The digital euro is more than a mere technological upgrade; it represents a critical strategic imperative for Europe's economic stability and autonomy.
By addressing vulnerabilities in retail payments and reducing reliance on non-European providers, it secures the future relevance of public money.
Its successful implementation hinges on continued public-private collaboration and robust legislative support, ensuring a resilient and competitive European payments ecosystem.