ECB Warns Europe Can’t Wait for Private Solution as Cash Use Plunges – Is CBDC the Answer?
The European Central Bank’s Piero Cipollone has intensified warnings that Europe can not afford to delay its digital euro project whereas ready for private-sector options, citing money use collapsing to only 24% of day by day transactions by worth in 2024, down from 40% 5 years earlier.
In a January 22 interview with El País, the ECB Executive Board member argued that the central financial institution should adapt its fee infrastructure as technological shifts go away Europeans more and more depending on non-European suppliers for digital transactions that now dominate the economic system.
The push comes as geopolitical tensions expose vulnerabilities in Europe’s funds structure, with current occasions exposing how international management over monetary infrastructure will be weaponized.
While Cipollone resisted framing the digital euro purely as a defensive measure, he acknowledged that “all these potential geopolitical tensions and the weaponisation of each conceivable device clearly improve the degree of threat” and reinforce the case for a totally European-controlled system.
Cash Retreat Forces Central Bank Adaptation
Cipollone detailed that e-commerce now accounts for greater than a 3rd of day-to-day transactions by worth, but central financial institution cash can’t be used for these purchases.
“We present each retail and wholesale fee strategies,” he stated. “At the retail degree, we provide money – nevertheless it doesn’t totally cowl folks’s wants, as a result of it could actually’t be used to pay digitally.“
The ECB official emphasised this represents accelerating change reasonably than steady situations.
A decade in the past, money dominated and met practically all shopper wants, however technological advances have essentially altered fee habits.
“The skill to make use of central financial institution cash for retail transactions is declining quickly,” Cipollone acknowledged, describing the digital euro as merely adapting to this new setting by complementing banknotes and cash with a digital equal.
Technical preparations are full after the ECB concluded its two-year preparation section in October 2025, with President Christine Lagarde confirming last month that “we have now performed our work, we have now carried the water.“
Responsibility now sits with the EU establishments to finalize laws, with Cipollone beforehand indicating that pilot transactions may start mid-2027 and the first issuance potential in 2029 if lawmakers approve the framework this yr.
Private Sector Solution Rejected as Insufficient
The ECB has dismissed proposals from some European Parliament members calling for authorities to attend whereas the banking sector develops pan-European fee options.
Cipollone stated the central financial institution has lengthy urged non-public options and welcomes integration efforts, however careworn that the digital euro itself will doubtless speed up the non-public sector’s growth of continental techniques.
As authorized tender, the digital euro would require any service provider at present accepting digital funds to just accept it, making a single public normal throughout all European retailers.
“Currently, when a fee service supplier (a financial institution or fintech agency) supplies providers to a service provider, the service provider has to enroll to its requirements,” Cipollone defined. “With the digital euro, there will probably be one single, open normal, which can even be obtainable for the non-public sector.“
He sharply criticized strategies that the digital euro launch only in offline mode, questioning how such an method may tackle the lack of viable European fee strategies for e-commerce.
“How can an offline resolution be used to pay in the e-commerce house? I don’t know,” Cipollone stated.
Geopolitical Leverage Exposes Infrastructure Vulnerabilities
Recent occasions have proven the dangers of international management in Europe’s fee techniques.
According to a Cryptonews report, Cipollone cited International Criminal Court judges whose U.S. playing cards had been blocked by Visa and Mastercard, limiting their skill to pay throughout Europe.
“With a digital euro they might have continued to pay all through the euro space,” he famous in a separate Süddeutsche Zeitung interview.
Seventy European economists amplified these concerns in a January 12 open letter warning that 13 euro space international locations now rely fully on worldwide card schemes for primary retail transactions.
“This dependence on international (U.S.) fee suppliers exposes European residents, companies, and governments to geopolitical leverage, international business pursuits, and systemic dangers past Europe’s management,” the teachers wrote, demanding the digital euro perform as “the spine of a sovereign, resilient European fee infrastructure.“
Seventy European economists warn that weak digital euro design may go away Europe reliant on US fee techniques and dollar-backed stablecoins.#DigitalEuro #EU #Stablecoinhttps://t.co/FqcWLtAyEG
— Cryptonews.com (@cryptonews) January 12, 2026
The weaponization of fee techniques gained recent relevance when President Trump’s January 19 tariff threats towards eight European nations over Greenland triggered $875 million in crypto liquidations within 24 hours, displaying how geopolitical tensions quickly cascade by monetary markets.
While Cipollone averted commenting straight on U.S. political developments when requested about Federal Reserve Chair Jerome Powell’s independence, he emphasised that the ECB focuses completely on euro space inflation focusing on.
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