ECB Official: Digital Euro Crucial for EU Sovereignty

Digital Euro Pilot Set for Next Year, ECB Official Eyes 2029 Rollout

Piero Cipollone, a member of the European Central Bank’s Executive Board, has indicated that the European Union is on track to test real-world transactions with a digital euro in 2027, with a potential rollout as early as 2029, contingent on legislative approval this year.

The digital euro, slated for a pilot phase next year, could grant the bloc greater “sovereignty” over its payments infrastructure, which currently relies on external, non-European third parties, Cipollone stated.

Speaking in an interview with Italy’s Milano Finance, published by the central bank on Saturday, Cipollone emphasized the challenges in ensuring the smooth functioning of payment systems due to critical dependence on external entities. He did not name specific third parties.

“In recent years, Europe has learned that for some essential services, we cannot rely solely on third parties,” Cipollone said. “We saw this with energy, and we are seeing it today with defense. The same is true for payments.”

The upcoming pilot will involve actual transactions conducted by staff from the ECB and national central banks. With 36 market operators, including seven from Italy, already collaborating on preparations, the ECB is extending invitations to e-commerce and mobile-commerce operators to participate.

“The smooth functioning of payment systems is one of our responsibilities,” Cipollone reiterated. “If we are critically dependent on third parties, it is not easy to ensure this smooth functioning.”

Cipollone clarified that achieving sovereignty does not equate to excluding third parties. “It means having the power to choose and knowing that, for an essential service like payments, Europe can also rely on its own strength.”

In a public lecture delivered in Latvia in April, Cipollone highlighted Europe’s reliance on non-European payment providers as a strategic vulnerability. He noted that two-thirds of euro-area card transactions are managed by non-European companies, and that a digital euro could mitigate this dependence by providing a European-controlled payment infrastructure.

The ECB’s Governing Council can only make a formal decision on issuing a digital euro after legislative negotiations in Brussels are concluded.

“We hope that the regulation will be adopted by the end of the year, enabling the ECB’s Governing Council to issue a formal decision on issuance,” Cipollone told Milano Finance.