Digital euro absence risks European payment system fragmentation, ECB official cautions
Without a digital euro from the European Central Bank, fragmentation risks across tokenization platforms could escalate, an executive board member has cautioned.
An executive board member at the European Central Bank (ECB) has issued a warning that the absence of a central bank-issued digital euro could pave the way for alternative providers, potentially undermining Europe's "resilience and monetary sovereignty."
During a Monday MNI Connect Webcast, ECB executive board member Piero Cipollone stated that the lack of a "pan-European digital payment solution that caters to every type of day-to-day transaction" could lead to increased fragmentation across tokenization platforms. He emphasized that the central bank should aim to develop a digital euro that can be exchanged across banking institutions for everyday transactions.
"Our objective is not to take over the role of banks. On the contrary, the digital euro would equip banks with the infrastructure they need to compete in the digital age and help them expand the reach and use cases of their own solutions."
Piero Cipollone, ECB executive board member
Cipollone noted that the ECB has yet to make a final determination on whether to launch a digital euro, though the institution intends to finalize the legislative process by the end of 2026. If the central bank chooses to proceed with the initiative, a 12-month pilot program is scheduled to commence during the second half of 2027, potentially leading to an official issuance in 2029.
The ECB initially put forward the concept of introducing a digital euro in October 2020 as a central bank digital currency (CBDC) designed to serve as a complementary digital payment option alongside physical cash. Opponents of the CBDC have expressed concerns that the digital currency could provide EU authorities with tools to monitor and possibly regulate the spending activities of citizens within the bloc.
In September 2025, Cipollone stated that "the digital euro will ensure that all Europeans can pay at all times with a free, universally accepted digital means of payment, even in case of major disruptions."