The member of the ECB Executive Committee, Piero Cipollone, asserted on Thursday in Rome the necessity of the digital euro for the single currency to maintain its central role in an increasingly digitalised economy.
The European Central Bank (ECB) has once again focused on the need for a digital euro as a guarantee that European citizens maintain control over their money in a world where electronic payments are gaining ground. This was defended on Thursday in Rome by Piero Cipollone, a member of the ECB Executive Committee, during his speech at the Annual Assembly of the Federation of Italian Cooperative Credit Banks (Federcasse).
Cipollone reminded that money is, in essence, a social convention backed by law. “Without that agreement, money would be just a simple piece of metal, a piece of paper, or a chain of code,” he pointed out. The digital euro, he explained, is the ECB's response to the unstoppable digitalisation of the economy, which is leaving cash sidelined in more and more areas.
Digitalisation threatens the role of cash
The executive detailed how the method of payment is changing at great speed. Cards and mobile applications are gaining followers, while the use of cash is declining. Mobile payments already exceed one in ten transactions at points of sale in Ireland, the Netherlands, and Finland, according to ECB data. Furthermore, e-commerce now represents a third of everyday payments, an environment where cash has no place.
This change is not innocuous for commercial banks. Cipollone warned that when customers use mobile payments, banks often pay higher fees than with debit cards and frequently lose information about the transaction. “If the use of stablecoins increases in the future, banks will also lose retail deposits,” he cautioned.
A European infrastructure under pressure
The ECB is also concerned about the dependence on non-European payment infrastructures. According to Cipollone, two-thirds of card payments in the euro area are currently processed with systems outside the Union, and that share continues to grow. Of the 21 euro countries, 13 lack a national card scheme, and more than half do not have a domestic solution for e-commerce payments.
“These developments raise two major sets of questions: one for the central bank, another for commercial banks,” he stated. For the institution headed by Christine Lagarde, the issuance of means of payment is part of its mandate. “If we do not offer a digital form of cash in an increasingly digitalised economy, we can legitimately ask ourselves if we are still fulfilling our mandate,” he emphasised.
The role of banks in distribution
Far from seeing the digital euro as a threat, Cipollone insisted that commercial banks will play a key role in its distribution. “In recognition of the service they have provided to customers for centuries, banks will play a fundamental role in the distribution of the digital euro,” he assured. The project, he added, will not only preserve European monetary sovereignty but will also offer entities an opportunity to retain and develop their relationships with customers in an increasingly digital world.
The digital euro is presented as a complement to banknotes and coins, not as a substitute. For the average citizen, this means that they will still be able to use cash if they prefer, but they will also have a public, secure, and free option to pay online or in physical stores. The launch date is not yet set, but the ECB continues with preparatory work while the European Parliament and the Council negotiate the legal framework.
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