In a speech at an MNI Connect webcast, European Central Bank Executive Board member Piero Cipollone presented the digital euro, Pontes and Appia as a single strategy to keep central bank money at the core of increasingly digital retail and wholesale markets. He argued that a digital euro could provide a pan-European payment network without displacing banks, while Pontes and Appia would anchor tokenised finance in central bank money and limit fragmentation across closed platforms. ECB analysis covering 2,025 banks found that hypothetical digital euro holding limits of EUR 500 to EUR 3,000 would contain deposit outflows within the tested scenarios. Under business-as-usual assumptions, projected deposit growth from the continued shift away from cash would exceed digital euro-related outflows at aggregate level for all limits assessed. Excluding those inflows, a EUR 3,000 limit would reduce the aggregate liquidity coverage ratio from 166% to 163% and the net stable funding ratio from 128% to 127%. Even under an extreme flight-to-safety scenario, only 13 banks representing 0.3% of sector assets would see their liquidity coverage ratio fall to 100%, with nine at risk of dropping below that level. The eventual limit has not been decided, and the digital euro would also be nonremunerated and supported by mechanisms that move excess balances to linked bank accounts. EU trilogue negotiations on the digital euro legislation are underway, and the ECB Governing Council will decide whether to issue it only after the legislation is adopted. Assuming completion by the end of 2026, the ECB aims to be ready for possible first issuance in 2029, following a 12-month pilot beginning in the second half of 2027 with 36 payment service providers. In wholesale markets, Pontes is already operational and is expected to offer 24/7 service and expanded functionality by mid-2028, while Appia is targeting a blueprint for an integrated European tokenised financial ecosystem in 2028.
European Central Bank's Piero Cipollone outlines digital money strategy and finds tested digital euro limits can contain deposit outflows
European Central Bank Executive Board member Piero Cipollone presented the digital euro, Pontes and Appia as an integrated strategy for retail payments and tokenised finance. ECB analysis of 2,025 banks found that tested digital euro holding limits of EUR 500 to EUR 3,000 could contain deposit outflows while keeping aggregate liquidity metrics above regulatory thresholds. A digital euro pilot is planned for the second half of 2027, with possible issuance readiness targeted for 2029 subject to EU legislation and an ECB decision.