The European Central Bank must become a “tech organisation” and issue digital money if it wants to preserve its role at the core of Europe’s financial system, ECB Executive Board member Piero Cipollone said on Monday in Frankfurt. Speaking at the Frankfurt School of Finance & Management on 8 December 2025, he warned that doing nothing as technology reshapes payments would erode monetary sovereignty, financial stability and the international role of the euro.
“If central banks don’t issue digital money, they will lose their central role in money issuance,” Cipollone said, arguing that public money has to remain “fit for purpose” in a digital era. He framed the challenge as a paradigm shift in which banks and technology firms have both become fintechs, and central banks must follow if they want to remain the anchor of stability for private money.
Cipollone set out three main risks for Europe. Retail payments remain fragmented, leaving merchants and consumers heavily dependent on non European card schemes and wallets, which raises questions about strategic autonomy. New tokenised financial markets could evolve around private or foreign settlement assets, undermining the balance between public and private money that supports monetary stability. At the same time, slow and expensive cross border payments are fuelling demand for dollar based stablecoins, which could weaken the euro’s global role if no strong European alternative emerges.
Digital euro, Pontes and Appia as the new public rails
To address these risks, Cipollone outlined a three dimensional strategy for retail, wholesale and cross border payments built on public private partnership and “technology neutrality.” In retail, the digital euro is intended to act as a legal tender, pan European, digital equivalent of cash that citizens can use in shops, ecommerce and person to person transactions across the euro area. It would sit alongside cash, not replace it, and would be distributed by banks and payment providers who keep the customer relationship.
The design, he stressed, aims to protect banks’ role in financing the economy. The digital euro would not be remunerated, would be linked to commercial bank accounts so customers can pay amounts above their wallet balance, and would be subject to holding limits to prevent destabilising deposit outflows. A pilot in 2027 will allow banks to test the system in a simulated environment and provide feedback before any full launch. Cipollone also highlighted opportunities for private providers, including co-badging with existing European card and wallet solutions and using a common rulebook and “reservation of funds” functionality to build conditional and programmable payments at scale.
In wholesale markets, the ECB will offer tokenised central bank money to support settlement of DLT based securities and cash transactions. Cipollone warned that relying on “fragmented pools of private settlement assets” could splinter liquidity and test the promise of one to one convertibility in times of stress. Project Pontes, approved by the Governing Council, will act as a bridge between market DLT platforms and existing TARGET services, providing delivery versus payment in central bank money as early as the third quarter of 2026.
A second track, Project Appia, will explore a future integrated digital asset ecosystem in which central bank money, commercial bank money and tokenised assets can interact efficiently. The ECB plans to publish a launch paper in early 2026. Appia will examine both a shared European ledger and a network of interoperable platforms, with the aim of building a “digital capital markets union” that avoids the fragmentation seen in today’s post trade landscape.
On cross border payments, Cipollone warned against a world dominated by a few global, dollar backed stablecoins operated on large platforms, citing risks of concentration, external rule setting and digital dollarisation. Instead, he pointed to the Eurosystem’s TIPS platform as a hub for instant payments, already used by Sweden and Denmark and being linked with India’s UPI and the BIS Nexus initiative. A “TIPS clone” for Western Balkans central banks is due to go live in 2026, and the ECB is also exploring tokenised settlement assets to complement interlinking and, in future, a digital euro designed with controlled international use in mind.
Cipollone stressed that the ECB is not trying to crowd out private innovation, but to provide “solid public foundations” that allow European solutions to scale without building new dependencies on non European infrastructures. The public sector, he argued, should not choose technologies or business models, but must ensure that payment and financial systems remain robust, integrated and anchored in central bank money.
The speech reinforces the ECB’s broader digital euro narrative, including earlier milestones such as the completion of the preparation phase and ongoing legislative work in Brussels, which Digital Euro News has covered in depth.
Cipollone closed by posing a strategic choice for the EU: either Europe “sits on the sidelines” while others define the next wave of digital money, or it acts now, through public private partnership, to build an innovative, integrated and resilient financial system with the euro at its core.