A digital euro could help the European Union reduce its dependence on non-European payments providers and gain greater control over critical financial infrastructure, according to European Central Bank Executive Board member Piero Cipollone.
In an interview with Italy’s Milano Finance published by the ECB on Saturday, Cipollone said the project is aimed at improving Europe’s ability to rely on its own payments systems for an essential service, while stressing that “sovereignty” does not mean excluding outside providers.
Payments dependence framed as a strategic issue
Cipollone said Europe is currently reliant on external third parties for parts of its payments infrastructure, a situation he described as problematic for ensuring the smooth functioning of a system that falls within the ECB’s responsibilities. He did not identify specific companies or providers.
He compared the issue to other sectors where Europe has reassessed dependence on outsiders, saying the same logic now applies to payments. In his account, the question is not isolation from foreign providers but whether Europe has the capacity to choose and to rely on its own infrastructure when needed.
Pilot work set to expand with real transactions
According to Cipollone, the digital euro is set for a pilot phase next year. That testing is expected to involve real transactions carried out by ECB staff and employees of national central banks.
Preparatory work is already underway with 36 market operators, including seven from Italy. The ECB is also inviting e-commerce and mobile-commerce operators to join the process, broadening industry involvement ahead of any future issuance decision.
Earlier warnings on non-European card networks
Cipollone has raised the same concern before. In a public lecture in Latvia in April, he said Europe’s dependence on non-European payment providers amounted to a strategic vulnerability.
At that event, he said two-thirds of euro-area card transactions are governed by non-European companies. He presented the digital euro as one possible way to reduce that reliance by creating payment infrastructure under European control.
Issuance still depends on EU legislation
The ECB has not yet decided to issue a digital euro. Cipollone said the Governing Council can only take that formal step once legislative negotiations in Brussels are complete.
He said the expectation is that the regulation could be adopted by the end of the year. If that happens, it would allow the Governing Council to make a formal decision on issuance, setting up the next confirmed step for the project after the pilot and preparation work already described.
Source: cointelegraph.com