ECB Says Digital Euro Is Key to Europe’s Payment Sovereignty, Plans Pilot Next Year

The European Central Bank said the introduction of a digital euro would reduce Europe’s reliance on offshore payment service providers and help secure the region’s payment sovereignty.

Cointelegraph reported on October 25 that ECB Executive Board member Piero Cipollone told Milano Finanza in an interview that Europe has learned it cannot rely entirely on outside providers for essential services such as energy and defense. The same applies to payments.

Cipollone said Europe’s payment infrastructure currently depends heavily on non-European companies. Ensuring the smooth functioning of payment systems is one of the ECB’s responsibilities, and that becomes harder when dependence on third parties is too high.

Cipollone has previously said that about two-thirds of euro-area card transactions are processed through systems operated by non-European companies. He said a digital euro would help reduce that reliance by giving Europe payment infrastructure it can control itself.

He added that payment sovereignty does not mean excluding outside companies from participating. Rather, sovereignty means having the power to choose, and Europe should be able to rely on its own capabilities for essential services such as payments.

The ECB plans to move ahead with a digital euro pilot next year. The project will involve ECB and national central bank staff taking part in real transactions, while 36 market participants — including seven Italian companies — are helping with preparatory work. The ECB is also seeking participation from e-commerce and mobile commerce businesses.

A final decision on whether to formally issue the digital euro will be made after related legislation is finalized. Cipollone said he hopes the relevant rules will be adopted by the end of this year so the ECB’s Governing Council can make a formal decision on issuance.