Piero Cipollone Discusses Digital Euro and Central Banks' Role in Evolving Financial Landscape

In a speech on October 6, 2026, Piero Cipollone, Member of the Executive Board of the European Central Bank (ECB), highlighted the challenges and opportunities presented by the ongoing digital transformation in finance. As digital payments become increasingly prevalent and new technologies like distributed ledger technology (DLT) emerge, central banks must adapt to maintain their role in the monetary system.

Cipollone emphasized the need for a digital form of cash to ensure a stable public money system that supports innovation while mitigating risks such as fragmentation in payment solutions. He stated, "The question is not whether payments and finance will become more digital. They already are," stressing the importance of preserving the trust and stability of money during this transition.

A key focus of his address was the preparation for a digital euro, which aims to provide a comprehensive payment solution for everyday transactions across the euro area. Currently, no European digital payment method meets the needs across all member states, as many rely on international card schemes. The digital euro would fill this gap, offering an online and offline payment option usable in various settings, while banks would manage customer relationships and distribute the digital currency.

To maintain financial stability, the digital euro will have measures such as holding limits to prevent large outflows from banks. Cipollone cited analysis projecting manageable impacts on banks' liquidity, indicating that the design of the digital euro aims to safeguard banks' roles rather than diminish them.

Cipollone also discussed two initiatives: Pontes and Appia. Pontes, launched on September 21, enables wholesale tokenized transactions to settle using central bank money, facilitating a safe transition into digital finance. Appia is focused on creating an interoperable ecosystem for tokenized financial assets, based on collaborative efforts with the market.

As the ECB moves forward, the legislative process for the digital euro is ongoing, with negotiations expected to conclude by the end of 2026. A pilot is planned for the second half of 2027, involving 36 selected payment service providers. The ECB is committed to ensuring that Europe’s financial system remains innovative and competitive in the digital age, while upholding the principles of trust and stability that underpin money.