ECB executive board member Piero Cipollone on Friday praised the prospects of the digital euro, outlining how its implementation would simplify payments across the euro area.
According to Cipollone, when the euro was introduced twenty-five years ago, it connected Europe in a way few imagined, with people across countries using the same banknotes and coins.
Cipollone said, “Who would have thought that the contents of our wallets could connect us all?”
By eliminating extra fees and ensuring that payments would be accepted universally, the euro banknotes made life simpler for European families, merchants, and travellers.
However, in today’s digital age, that simplicity is fading. Cipollone explained, “Most Europeans now juggle different cards, apps, and devices depending on each payment situation, finding that the convenience of digital payments doesn’t always live up to the promise.”
This fragmentation affects the euro area, where digital solutions fail to meet the variety of users’ needs.
For example, while paying contactless with a card in cities like Madrid or Paris is straightforward, rural areas in Germany or Austria often only accept cash or local debit cards.
“Similarly,” Cipollone added, “some mobile apps work well for sending money to family or friends but aren’t accepted for online purchases or by local businesses.”
To address these issues, Cipollone proposed a solution. “What if we could bring back the universal simplicity of cash, while embracing the convenience of the digital age?”
A digital euro would provide a seamless way to pay across the euro area, reclaiming the freedom to make digital payments anywhere and anytime.
He emphasised that a digital euro would work in tandem with traditional banknotes, “providing – for free – an all-in-one digital payment option across the euro area,” potentially ending the current fragmentation.
Accessing a digital euro would be straightforward. Europeans could use their digital euro wallet through a designated app, their bank’s app, or even a physical card to make instant payments.
Cipollone illustrated how a digital euro could simplify everyday transactions. “Imagine stopping at a café on your way to work and realising you’ve forgotten your wallet or don’t have enough cash,” he described.
“Or perhaps your card isn’t accepted when you go to pay. With a digital euro, you could pay seamlessly for your coffee by card or smartphone in all those situations,” since it would be accepted by all merchants in the euro area who already support digital payments.
He explained that the digital euro would be like a digital banknote, “allowing you to pay for things in all euro area countries,” making travel even easier.
A digital euro would also enhance payment convenience for various everyday scenarios, such as paying babysitters, sending money to children studying abroad, or shopping online.
Cipollone noted that it could even accommodate new payment situations, allowing users to “pay on delivery, for example, or when/if a train has arrived on time.”
He stressed the digital euro’s potential to serve as a robust fallback option in emergencies. “Using the offline function, you’d even be able to pay without an internet connection,” Cipollone explained, ensuring continuity in critical situations like internet outages or in remote locations with limited connectivity.
Privacy concerns would also be addressed with the digital euro, Cipollone assured. With offline payments, “personal transaction details would remain private – they’d only be known to you and the payment recipient, much like a cash payment.”
While a final decision on issuing a digital euro is still pending – a decision that will only be taken by the European Central Bank once European legislators have defined its legal framework – Cipollone emphasized the project’s benefits.
“You’d be able to make instant payments anytime and anywhere in the euro area, with a single, free solution backed by the highest security and privacy standards.”
He argued that a digital euro represents “the logical next step for our single currency,” one that would simplify lives, making Europe’s payment sector “more cohesive, competitive, innovative, and resilient.”
Cipollone concluded, “I think – and I hope you agree – that’s something worth considering.”
