In a speech at the France Payments Forum, European Central Bank Executive Board member Piero Cipollone positioned a digital euro as a digital complement to cash intended to provide a pan-euro area payment option and reduce reliance on non-European payment providers. He also outlined parallel Eurosystem work to support settlement of distributed ledger technology (DLT)-based wholesale transactions in central bank money, alongside ongoing upgrades to TARGET Services. Cipollone pointed to the decline in cash use and the scale of external dependencies, noting that online shopping accounts for more than one-third of retail transactions and cash represented 24% of day-to-day payments in the euro area last year, while nearly two-thirds of euro area card-based transactions are processed by non-European companies and 13 euro area countries rely entirely on international card schemes or mobile solutions for in-store payments. The digital euro was described as having legal tender status for digital payments, being usable offline with privacy similar to cash and being free for basic use, with banks remunerated for distribution, and with open standards that could be finalised once the digital euro regulation is adopted and used before issuance. On implementation work, around 70 private-sector participants have joined an innovation platform testing digital euro features, including conditional payments. For wholesale markets, he cited TARGET Services’ role in large-value and securities settlement, an imminent consultation on further extending T2 operating hours, the planned launch of the European Collateral Management System on 16 June 2025 and the move to T+1 settlement in October 2027, as well as exploratory DLT work involving 60 participants and EUR 1.6 billion settled over six months. Next steps include a report in July on the digital euro innovation partnerships and an extension of the testing exercise until end-June 2025. On wholesale DLT settlement, the Eurosystem plans a short-term solution for central bank money settlement and will explore longer-term options, including a shared ledger approach or a set of fully interoperable solutions.
European Central Bank 2025-05-15
European Central Bank sets out the digital euro proposition and next steps for settling DLT-based wholesale transactions in central bank money
ECB Executive Board member Piero Cipollone emphasized the digital euro as a cash complement, offering a pan-euro payment option and reducing reliance on non-European providers. He discussed Eurosystem efforts to support DLT-based wholesale transactions and TARGET Services upgrades. Cipollone noted declining cash use and non-European dominance in euro area card transactions, with further developments expected in digital euro testing and wholesale DLT settlement solutions.