The European Central Bank (ECB) sees a digital euro as a way to reduce the European Union’s reliance on foreign payment providers and strengthen control over its financial infrastructure as the bloc seeks greater technological and economic autonomy.
ECB Executive Board member, Piero Cipollone, said Europe’s dependence on non-European companies creates vulnerabilities in essential payment services. He said the digital euro would give the bloc a publicly-backed alternative without excluding foreign providers from the market.
In an interview, Cipollone said:
“Payments constitute a strategic infrastructure for Europe and, as a central bank, ensuring the smooth functioning of payment systems falls within our mandate. Whenever we buy something online or pay for a coffee, we think about the price of what we’re buying. But we hardly ever think about how the payment is made. Yet if the payment system stops working, the economy stops working.”
Cipollone revealed that purchases are increasingly being made online.
“In Italy, for example, according to the latest available data, online payments grew from 6% of the total in 2019 to 24% in 2024. And I expect they’ve grown even more since then.
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Highlighting the risks of over-dependency on non-Euro operators, Cipollone said:
“These online purchases are normally made via card payments and two thirds of these payments are made using non-European card schemes. For most euro area countries, this dependence on non-European operators is not limited to online payments but also extends to physical shops, because they don’t even have anything like Italy’s Bancomat that would enable payments to be made in local shops.
In short, for an essential service like payments, we are heavily dependent on an infrastructure over which we have no direct control.”
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There will be two options.
Banks will be able to integrate the digital euro into the apps their clients already use, while
the Eurosystem will offer an easy-to-use, standardised, reliable app with the basic functions.
“Even if you use the latter option, your relationship will nevertheless still be with your own bank; the ECB will not open accounts for people,” says Cipollone.
The digital euro payments will also work offline during a power cut or in remote and isolated areas where there’s no internet connection or where the connection is weak and sporadic.
“It will suffice to bring two devices together, as when using a contactless card today.
The payment will be made directly between the payor and payee, without going via the internet. It means merchants can keep receiving payments even when other digital payment methods are not available.”
The ECB plans to pilot test real transactions in 2027 with ECB and other national central banks with a potential launch in 2029 subject to EU legislation expected to advance by the end of 2026.
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The project aims to provide a digital form of central bank money for everyday payments, complementing cash and existing payment systems.
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