In a speech to the Italian Parliamentary Committee of Inquiry, European Central Bank (ECB) Executive Board member Piero Cipollone set out the case for a digital euro as a digital complement to cash, aimed at preserving access to central bank money in a digital economy and reducing Europe’s reliance on non-European retail payment providers. He stressed that issuance depends on a robust legal framework and highlighted the importance of the ongoing work by EU co-legislators. Cipollone argued that the decline in cash use and the dominance of non-European card schemes in the euro area create vulnerabilities for Europe’s payment infrastructure, noting that almost two-thirds of card-based transactions are carried out by non-European companies and that 13 euro area countries rely entirely on international card schemes. The proposed design features included universal acceptance across the euro area, free basic use, online and offline functionality, and privacy safeguards, with offline transactions limited to payer and payee and online payments visible to the Eurosystem only as encrypted codes and amounts, while banks would retain the link to user identities. Banks and other supervised intermediaries would distribute the digital euro, holdings would be non-remunerated and subject to holding limits, and wallets could be linked to commercial bank accounts; the ECB also pointed to an agreement with the ONCE Foundation to support accessibility. For merchants, the ECB described the digital euro as a pan-euro area alternative intended to lower dependency on card schemes, with small merchants expected to pay approximately half of current digital-payment costs, supported by a compensation model that excludes Eurosystem scheme and settlement fees. On next steps, the ECB said it would shortly publish a call for interest for payment service providers to participate in a pilot exercise. Cipollone welcomed the Council of the European Union’s agreement on its negotiating position, which preserves core elements such as legal tender status, mandatory distribution and acceptance, and online and offline functionality, and noted the European Parliament is expected to reach its position in May. He also pointed to related Eurosystem work on wholesale and cross-border payments, including the Pontes and Appia initiatives for settling distributed ledger technology transactions in central bank money, with Pontes targeted for launch in the third quarter of this year.
European Central Bank 2026-02-19
European Central Bank signals a near-term digital euro pilot call for interest as EU co-legislators advance the proposed Regulation
ECB Executive Board member Piero Cipollone advocated for a digital euro to complement cash and reduce reliance on non-European payment providers, emphasizing the need for a robust legal framework. The digital euro would feature universal acceptance, free basic use, and privacy safeguards, with banks distributing it and holding limits applied. Cipollone noted the ECB's plans for a pilot exercise and highlighted ongoing work on wholesale and cross-border payments, including the Pontes initiative.