Interview with Piero Cipollone, Member of the Government Board of the ECB, performed by Élisabeth Montaufray-Bureau on 10 July 2026
15 July 2026
What’s your view on final Thursday’s vote by the European Parliament to again the digital euro?
It was an important step as a result of the Parliament represents Europe’s residents and its endorsement lends nice legitimacy to the undertaking. The Parliament voted nearly 70% in favour of the digital euro. It took the time to hearken to all European stakeholders – retailers, residents and banks – and to different central banks outdoors the euro space. This democratic course of has helped be sure that the digital euro is totally strong. The digital euro will safeguard the liberty of Europeans to decide on how they pay. That was the difficulty at stake within the vote.
What would you say to those who voted towards the digital euro?
I additionally listened fastidiously to those that voted towards it. That they had two essential causes for doing so: safety of privateness and issues a few type of Huge Brother-style surveillance. However we designed the digital euro with these issues in thoughts: it would supply the very best diploma of privateness at the moment potential with right this moment’s expertise.
If you pay offline, the digital euro will supply cash-like ranges of privateness: the transaction particulars will probably be identified solely to the payer and the payee. And even once you make funds on-line, the central financial institution won’t know that you just’re the one who made them. All the information will probably be encrypted; solely your financial institution will know that you just made the cost.
For you, is the digital euro a purely technical undertaking or a geopolitical one?
Offering a way of cost is on the coronary heart of a central financial institution’s mandate. That’s what we do now by offering money and issuing euro banknotes. And we are going to proceed to take action.
However the financial system has advanced. Right this moment, one-third of Europeans’ transactions happen on-line, on e-commerce web sites. Naturally, we are able to’t use money for these funds. It’s subsequently crucial to supply Europeans with a digital type of money to enrich the bodily banknotes and cash we’re aware of.
The digital euro is a technical response within the truest sense of the phrase. However it additionally brings advantages within the present geopolitical context. At present, a lot of the infrastructure that individuals in Europe use to make their on a regular basis funds isn’t in European fingers. That’s an issue for the central financial institution, whose function is to make sure the graceful functioning and continuity of cost methods. The digital euro will tackle this concern.
How will the pilot as a result of begin in September 2027 work?
It would initially be a small-scale pilot of the digital euro. It would contain retailers, banks and, as customers, workers of the ECB and the nationwide central banks.
In March we invited European cost service suppliers, together with banks, to participate on this pilot. Greater than 50 utilized. We chosen 36 members – together with French suppliers like BPCE (a banking group that features Banque Populaire, Caisse d’épargne and Crédit Coopératif) and Worldline (a number one firm specialised in cost processing). This choice permits us to cowl a variety of profiles throughout nearly your entire euro space. We are going to work collectively to arrange for the pilot, which we plan to launch in September 2027 for a interval of 12 months.
What’s the enterprise mannequin of the digital euro?
The present enterprise mannequin for card funds includes six essential gamers: the shopper, the service provider receiving the cost, the banks – particularly the shopper’s financial institution and the service provider’s financial institution – the technical service supplier that processes the transaction and, lastly, the proprietor of the cardboard scheme, equivalent to Visa, Mastercard or Cartes Bancaires, which defines the principles of the sport. At current, retailers should pay a share of the transaction worth to cowl each the cardboard scheme’s charges and the charges charged by the banks concerned within the transaction.
Against this, with the digital euro, the ECB and the nationwide central banks will set the principles of the sport, whereas respecting the legislator’s decisions and involving all stakeholders. And the ECB will neither gather any scheme charges nor cost any charges for processing transactions. It will create financial savings that may be shared amongst retailers and banks. How these financial savings will probably be distributed continues to be being mentioned by European legislators. However what is for certain is that retailers will profit. They are going to be required to just accept the digital euro for digital funds, simply as they’re required to just accept money right this moment. However they are going to be protected by a cap on the charges they should pay.
And on the cybersecurity entrance?
Safety is our prime precedence, particularly given the advances in synthetic intelligence.
Happily, the ECB already has in depth expertise with cost methods. The Eurosystem – comprising the ECB and the euro space nationwide central banks – at the moment operates three of them. One is a cost system known as T2, which is used for interbank funds. Each eight days, T2 processes a quantity of transactions with a worth equal to the euro space’s annual GDP. One other system is used to settle securities transactions whereas the third permits immediate funds. All of those methods, that are important to the functioning of the European financial system, meet the very best cybersecurity requirements, and we constantly check and strengthen them. We are going to do the identical for the digital euro.
How a lot will the digital euro price?
There are two elements to this: the fee for the Eurosystem and the fee for the banks that can present this service. These prices will rely on the ultimate choices taken by the legislators, notably concerning the variety of digital euro accounts that every European will probably be allowed to carry. Nevertheless, we at the moment estimate that the overall growth price for the Eurosystem can be round €1.3 billion, with annual working prices operating to roughly €320 million.
These prices will probably be greater than offset by the revenues generated by the Eurosystem from issuing the digital euro, as is already the case with money: this revenue is called seigniorage.
The annual prices for euro space banks of making ready for the digital euro over a four-year interval would quantity to not more than 3.4% of the price range they spend every year on updating their IT methods. The prices subsequently stay manageable.
What’s the distinction between Wero and the digital euro?
There are two essential variations. For one, the digital euro is central financial institution cash, identical to money. Wero, in contrast, lets you make funds utilizing the cash held in your checking account. The opposite distinction is that the digital euro will probably be accepted by all European retailers. Customers will probably be sure that they will pay with the digital euro all through the euro space, whether or not linked to the web or not. They may be capable of use it for in-store, person-to-person and on-line funds.
The digital euro may even profit options equivalent to Wero. By utilizing digital euro requirements, these options will be capable of extra simply develop their acceptance amongst a wider vary of retailers. And by integrating the digital euro, they will be sure that their customers are capable of make funds in all conditions, wherever within the euro space. So in locations the place Wero isn’t but accepted, customers might nonetheless pay utilizing digital euro, permitting the transaction to undergo.
This is likely one of the advantages of the digital euro: it would assist European cost options develop and can assist innovation. It would assist enhance the companies accessible to Europeans whereas additionally lowering transaction charges, that are finally mirrored within the costs customers pay.
Leaving the digital euro apart, the ECB will maintain one other financial coverage assembly on the finish of July. Why elevate your key rates of interest when the inflation we’re seeing right this moment is being imported via greater oil costs?
We’re at the moment dealing with an vitality shock, pushed notably by oil costs. When vitality costs rise, they’ve three essential results. The primary is a direct impact: for instance, customers pay extra on the petrol pump. The second is an oblique impact: a rise in vitality costs pushes up the prices of manufacturing items and results in greater costs, together with for meals. The third kind of impact is what we name second-round results: when households and companies anticipate inflation to stay excessive, corporations elevate costs to guard their revenue margins whereas workers search bigger wage will increase. If these changes turn into too pronounced, they create further prices that, in flip, feed into inflation.
Right this moment we’re observing the primary two results however not the third. What the ECB can do via its financial coverage is stop these second-round results from taking maintain and persuade households and companies that inflation will return to our 2% goal over the medium time period. That’s the reason we monitor inflation expectations very intently. If medium to long-term inflation expectations stay anchored at 2%, inflation will return to our goal and we can have accomplished our job.
