Eurosystem unveils comprehensive payments strategy for digital era
The Eurosystem has unveiled a comprehensive payments strategy to foster an innovative and competitive European market. The strategy addresses the profound transformation of payments driven by digitalisation and new technologies.
Four pillars for future payments
The Eurosystem's new strategy adopts a two-pronged approach: enhancing existing payment infrastructures while simultaneously catalysing and supporting new ones.
This vision is built upon four strategic aims.
Firstly, it seeks to ensure the effectiveness of monetary policy, financial stability, and the smooth functioning of payment systems by maintaining central bank money as the anchor of a two-tier monetary system.
Secondly, the strategy aims to achieve strategic autonomy and increased resilience for European payments, addressing vulnerabilities from external and technological threats.
Thirdly, it strives to foster an integrated, competitive, and innovative payments ecosystem across wholesale, business-to-business, retail, and cross-border payments.
Finally, the strategy supports the international role of the euro by ensuring efficient, secure, and integrated euro payment systems.
From T2 to tokenisation
To achieve its strategic aims, the Eurosystem will develop a European market for tokenised settlement assets, ensuring central bank money remains the anchor for settlement.
This involves improving existing infrastructure like T2 and investing in DLT-based solutions for wholesale payments via Pontes and Appia.
The strategy also targets enhanced standardisation and automation in corporate payments.
For retail, the digital euro project will adapt central bank money to the digital age, complemented by market-led solutions.
Additionally, the Eurosystem commits to advancing the G20 roadmap for faster, cheaper, and more transparent cross-border payments, leveraging current efficient solutions and new tokenisation innovations.
Ambitious vision, complex execution
This comprehensive strategy is a necessary evolution, reflecting the profound digital shift in payments.
While ambitious, its success hinges on effective coordination with market participants and regulators to overcome fragmentation.
The emphasis on central bank money as an anchor is crucial for stability, but integrating private innovation will be the true test of its long-term impact.
Source: The Eurosystem’s comprehensive payments strategy
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