In a contribution to an Aspen Institute Italia roundtable, European Central Bank Executive Board member Piero Cipollone set out a three-pillar Eurosystem strategy to modernise central bank money for a digital payments environment. The approach focuses on preparing for a potential digital euro, enabling settlement of distributed ledger technology (DLT) transactions in central bank money from 2026, and interlinking the Eurosystem’s instant payments platform with fast payment systems in other countries to improve cross-border payments. The contribution frames the strategy as a response to fragmented euro area retail payments and reliance on non-European card and wallet providers, the risk that tokenisation could develop around fragmented private settlement assets rather than central bank money, and persistent frictions in cross-border payments alongside the growth of stablecoins. On the digital euro, Cipollone said that, assuming EU co-legislators adopt the digital euro regulation in 2026, a pilot exercise and initial transactions could take place as of mid-2027 and the digital euro could be ready for first issuance in 2029. The digital euro is described as a digital form of cash that would be legal tender, usable across the euro area in physical and online shops, and available both online and offline, with banks distributing it and safeguards including non-remuneration, holding limits and links to commercial bank accounts. For wholesale markets, the ECB’s “dual-track” work on tokenised central bank money includes Project Pontes, which would connect market DLT platforms to TARGET services for settlement in central bank money, and Project Appia, which is exploring a shared European ledger model and a network of interoperable platforms. For cross-border payments, the contribution points to interlinking TARGET Instant Payment Settlement (TIPS) with other countries’ fast payment systems, starting with India, and notes that the digital euro is being designed with potential international use and multi-currency enabling features in mind. Next steps cited include the move from 2026 to allow settlement of DLT-based transactions in central bank money, and the launch of a digital euro pilot exercise for banks, with the broader digital euro timeline explicitly conditional on legislative adoption.
European Central Bank 2025-12-19
European Central Bank Executive Board member outlines digital euro, DLT settlement and cross-border fast payments strategy
ECB Executive Board member Piero Cipollone outlined a strategy to modernize central bank money for digital payments, focusing on a potential digital euro, DLT transaction settlement from 2026, and interlinking instant payment platforms. The strategy addresses fragmented euro area retail payments, reliance on non-European providers, and cross-border payment frictions. A digital euro pilot could begin in 2027, with issuance by 2029, contingent on legislative approval.