The European Central Bank is sharpening its public case for a digital euro, framing it less as a technical innovation and more as a necessary evolution of cash itself. In an interview published on Sunday, ECB Executive Board member Piero Cipollone said the project is ultimately about preserving Europeans’ freedom to use central bank money as payments increasingly move online.
Speaking to the Cyprus News Agency, Cipollone stressed that the ECB has not yet issued a digital euro and will not do so without a legal mandate from EU lawmakers. But he made clear that the central bank believes the case for a digital euro is becoming harder to ignore as cash loses relevance in everyday digital transactions.
“At its core, we are creating a digital version of cash,” Cipollone said, arguing that citizens should be able to rely on central bank money not only at physical tills but also online and in other digital contexts where banknotes cannot be used.
Payments, sovereignty and costs
A central theme of the interview is payment sovereignty. Cipollone pointed out that nearly 70 percent of card-initiated transactions in Europe are processed by non-European companies, a dependence he described as a risk to resilience and strategic autonomy. For a basic function such as paying, Europe, he argued, should not rely almost entirely on external providers.
The digital euro, in the ECB’s view, would offer a pan-European payment instrument that works everywhere, online and offline, without the fragmentation that currently characterises the market. Cipollone said this simplicity would benefit consumers, who today often need multiple cards or apps to cover different payment situations.
The ECB executive also highlighted the potential benefits for merchants, particularly small businesses. Accepting payments through international card schemes can be significantly more expensive for small retailers than for large chains. Cipollone estimated that small merchants may pay three to four times more per transaction. Because the ECB would not charge scheme fees for digital euro payments, he argued, the new instrument could materially reduce costs and strengthen competition.
Timeline and next steps
Cipollone provided one of the clearest outlines yet of the road ahead. On the legislative side, the European Commission tabled its proposal in June 2023, and the Council of the European Union agreed a common position late last year. The next key step is the European Parliament, which is expected to vote on its position around May 2026.
If the legislative process concludes by the end of the year, the ECB aims to be technically ready to issue a digital euro by mid-2029. Before that, a pilot phase involving real payments is planned to begin in 2027. Cipollone cautioned that the timing of issuance ultimately depends on lawmakers, as building the infrastructure will take as long as the legislative process itself.
Banks, stability and privacy
Addressing concerns from banks about potential deposit outflows, Cipollone reiterated the safeguards built into the design. The digital euro would not be remunerated, holdings would be capped, and a so-called waterfall mechanism would allow payments to be funded automatically from bank accounts without requiring users to pre-fund their wallets. Only individuals, not merchants, would be able to hold digital euro balances.
On privacy, Cipollone said the project has been designed around citizens’ expectations. For online payments, the ECB would not see personal transaction data, only encrypted identifiers, with customer information remaining with banks. Offline payments, he added, would offer even higher privacy, with transaction details known only to payer and payee.
A broader signal
The interview marks a shift in tone as much as substance. Rather than focusing on technical architecture, Cipollone presents the digital euro as a public good, linked to autonomy, resilience and fairness in payments. As EU legislators prepare to take critical decisions later this year, the ECB appears intent on making the debate less abstract and more tangible for citizens and businesses across the euro area.
Related: ECB’s Cipollone Says Digital Euro Is About Preserving Public Money