The European Central Bank has issued one of its clearest warnings yet that Europe risks losing control over its monetary future unless it reduces its dependence on foreign payment providers and US dollar stablecoins. In a speech in Rome on 12 February, ECB Executive Board member Piero Cipollone argued that safeguarding monetary sovereignty in the digital age now requires Europe to build its own retail and wholesale payment infrastructure around the euro.
Speaking at the Accademia Nazionale dei Lincei, Cipollone framed the debate in stark terms. “If we lose control of our money, we lose control of our economic destiny,” he said, linking the digital euro, tokenised central bank money and fast payment systems to broader geopolitical resilience.
The intervention matters because it situates the digital euro not as a technical upgrade, but as a strategic pillar of European sovereignty at a time of rising global fragmentation.
Digital Dependence Is Now a Strategic Risk
Cipollone highlighted that international card schemes account for two-thirds of card transactions in the euro area, while 13 of the 20 euro area countries do not even have a domestic card scheme. Even where domestic schemes exist, they often rely on co-badging arrangements or international wallets to function across borders.
In a more stable geopolitical environment, such dependencies might have been manageable. But in today’s context, he argued, reliance on non-European infrastructure for everyday payments exposes the euro area to economic and political leverage.
The concern extends beyond cards. US dollar-denominated stablecoins, which account for 99% of the global stablecoin market, are increasingly integrating with international card networks and exploring retail use cases such as cross-border e-commerce, tourism, gaming and machine-to-machine payments.
If these instruments were allowed to remunerate holders, Cipollone warned, their attractiveness could increase further, potentially eroding the role of bank deposits and, over time, the euro itself.
Digital Euro as a Public European Option
Against that backdrop, Cipollone presented the digital euro as a necessary complement to cash, not a replacement.
While cash remains widely used and the ECB is preparing a third series of euro banknotes, more than one-third of daily euro area payments are now online, where physical cash cannot be used. The digital euro would provide what he called a “European public option” for digital payments, available across the euro area and based on European infrastructure.
Crucially, he stressed that the digital euro would support private payment providers rather than crowd them out. By enabling co-badging and offering open standards with a universal acceptance network, it would make it easier for European banks and fintech firms to scale across borders without depending on proprietary foreign systems.
Issuance, however, remains conditional on the adoption of the digital euro Regulation by EU co-legislators.
Anchoring Digital Finance in the Euro
The speech also contained significant signals for wholesale markets.
Financial institutions are increasingly exploring tokenisation and distributed ledger technology to trade and settle assets around the clock. If the Eurosystem fails to offer tokenised central bank money, Cipollone warned, these emerging ecosystems could rely on non-euro settlement assets.
To prevent this, the ECB is preparing to launch “Project Pontes” in the third quarter of this year. The initiative will bridge the existing T2 settlement system with DLT-based platforms, enabling settlement in euro-denominated central bank money.
In parallel, “Project Appia” will work with market participants to develop a broader European digital finance ecosystem, potentially built around shared or interoperable ledgers.
The objective is clear: ensure that private tokenised assets remain anchored to risk-free central bank money, preserving trust and avoiding fragmentation.
Strengthening the Euro’s Global Role
Cipollone also linked monetary sovereignty to cross-border payments. As correspondent banking relationships decline globally, US dollar stablecoins risk filling the gap. Swift data show a 29% decline in active correspondent banking relationships between 2011 and 2022.
The ECB is therefore expanding connections between TARGET Instant Payment Settlement, known as TIPS, and fast payment systems abroad. Links already exist with Denmark and Sweden, while Norway is set to join in 2028. A connection with India’s Unified Payments Interface will go live in 2027, with discussions ongoing with Switzerland, Brazil and the Nexus network in Asia.
By shortening settlement chains and reducing reliance on third currencies, these links aim to reinforce the euro’s international use.
Sovereignty and Competitiveness
Beyond payments, Cipollone broadened the debate to capital markets. Europe’s venture capital market remains far smaller than that of the United States, and nearly 30% of European unicorns relocated abroad between 2008 and 2021, most to the US.
This reliance on foreign funding, he argued, weakens monetary policy transmission and undermines Europe’s capacity to retain innovation.
Rather than seeing resilience measures as costly, Cipollone suggested that reducing strategic dependencies can enhance long-term economic efficiency. A more integrated European payments and finance ecosystem, anchored in euro-denominated central bank money, could reduce merchant fees, support competition and strengthen Europe’s technology and financial sectors.
The message from Rome was unambiguous. In an era where payment networks and financial infrastructures can be weaponised, monetary sovereignty is no longer guaranteed by price stability alone. It depends on who controls the rails, the data and the settlement assets of the digital economy.
For the ECB, that means accelerating the digital euro and wholesale tokenisation agenda before Europe’s dependencies become irreversible.
Related: ECB’s Cipollone Says Digital Euro Is About Preserving Cash in a Digital Age