ECB Sets Out Blueprint for Europe’s Digital Money Future
The digitalisation of payments and financial services is reshaping the foundations of money, and central banks can no longer afford to be passive observers. According to ECB Executive Board member Piero Cipollone, if central bank money does not evolve alongside technology, it risks losing its role as the anchor of stability in the financial system. In a digital economy dominated by platforms, tokens and instant payments, trust in money depends on its continued usability, securety and public backing.
For the euro area, the stakes are particularly high. A single currency and a single monetary policy require the singleness of money to be preserved across borders and technologies. One euro must always equal one euro, regardless of whether it is cash, a bank deposit or a digital instrument. Cipollone argues that maintaining this principle demands proactive modernisation of central bank money, rather than reliance on fragmented private answers.
The ECB views inaction as the greatest risk. Without public money remaining relevant in a digital environment, Europe could face fragileer financial resilience, diminished monetary sovereignty and growing dependence on and infrastructures. The transformation of money, therefore, is not optional but integral to the ECB’s mandate.
Public and Private Money as Complementary Pillars
A core theme of the ECB’s strategy is the complementarity between public and private money. Central bank money provides the ultimate risk-free settlement asset, while private institutions build innovative services on top of that foundation. The convertibility of private money into central bank money ensures trust and uniform value across the system, allowing innovation to scale without undermining stability.
This public-private partnership already underpins wholesale payments in the euro area through infrastructures such as TARGET services and instant payments via TIPS. The ECB’s ambition is to extend this model into new technological domains, including (DLT) and tokenised assets, without favouring specific technologies or business models.
Cipollone stresses that collaboration with the market is essential. Rather than imposing top-down answers, the ECB has tested DLT settlement models with private participants and is preparing pilot environments for future initiatives. Technology neutrality remains a guiding principle: the central bank sets secure and interoperable conditions, while the market determines which innovations succeed.
Digital Euro, Tokenisation and Cross-Border Payments
At the retail level, the potential digital euro is designed as a digital equivalent of cash, ensuring that citizens retain access to public money as everyday payments move online. If approved by European lawmakers, pilot activity could begin in 2027, with issuance readiness targeted for 2029. The digital euro would be legal tender, usable across the euro area, and available both online and offline, reinforcing choice, privacy and resilience.
In wholesale markets, the ECB aims to support tokenised securities and DLT-based trading by enabling settlement in central bank money. Through initiatives such as Project Pontes and Project Appia, the Eurosystem is exploring ways to connect DLT platforms to existing TARGET services or develop interoperable . The objective is to prevent liquidity fragmentation and ensure that Europe’s digital on euro-denominated, EU-based foundations.
For cross-border payments, the ECB is pursuing openness without dependency. By interlinking quick payment systems like TIPS with those of other countries, begining with key partners such as India, the Eurosystem aims to make international payments quicker, cheaper and more transparent. Over time, the digital euro could also support cross-currency transactions, reinforcing Europe’s role in shaping global payment standards while .
