Digital Euro Aims To Secure Europe’s Payment Future
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
The European Central Bank is now advancing its digital euro plan to improve control over retail payments and boost innovation in both consumer and wholesale money transfers. This move comes as Europe grows more worried about depending on payment platforms outside the European Union.
A member of the ECB’s executive board, Piero Cipollone, shared that this concern has led the bank to act quickly. The goal is to protect Europe’s financial independence and to help shape how money will work in the future.
The ECB noticed a clear change in how people pay for things. In the past, cash was the main way to pay in daily life. But last year, only 24 out of every 100 retail payments in the euro zone used cash.
Digital Euro Addresses Changing Payment Habits and Market Balance
At the same time, many digital payments are handled by foreign companies like PayPal, Apple Pay, and Alipay. Almost two-thirds of card payments in Europe are processed by companies outside Europe, showing how strong their hold on the market is.
The digital euro will be a safe and widely accepted digital currency. It will work offline, protect user privacy like cash does, and be legal money. Cipollone highlighted that many surveys show people want this digital euro in their countries.
The ECB does not see the digital euro only as a way to handle money but also as a way to balance power among European shops, banks, and foreign payment companies. The digital euro could help European payment providers expand across countries more easily.
While most people focus on retail payments, the ECB is also preparing for big changes in wholesale finance. This means using new technologies like distributed ledger technology and tokenisation in big money markets.
ECB Prepares Wholesale Finance For A New Tech Era
The ECB’s current systems already handle most wholesale payments. But new technology could combine trading, settlement, and custody into one system that works all day, every day.
Using tokenised assets and programmable money could open new business ways and cut costs, especially for smaller market players. Last year, the ECB tested this with 60 market members, handling over €1.6 billion in six months—more than any other similar test worldwide.
Cipollone pointed out that building a strong and modern financial system needs teamwork from banks, fintech firms, and shops. The ECB has started creating a single rulebook for the digital euro and continues talking with many groups to bring this plan to life.
