The European Central Bank (ECB) is anticipating the digital transformation of payments and finance by preparing a digital euro and developing infrastructures for tokenized finance, explained Piero Cipollone, member of the ECB Executive Board, during a speech at MNI Connect.
According to him, the digitalization of payments is already underway, with growing adoption of technologies such as blockchain and the representation of assets as tokens. This evolution offers opportunities to make payments more convenient and finance more efficient, but it also poses risks of monetary fragmentation and increased dependence on foreign infrastructures, which could weaken European monetary sovereignty.
To preserve the “uniqueness of the currency,” trust, and the stability of the monetary system, the ECB aims to extend central bank money into the digital environment while maintaining a two-tier monetary system where public and private money coexist.
Concretely, this translates into preparing a digital euro for retail payments and initiatives like Pontes and Appia to enable the use of central bank money in tokenized wholesale transactions and to support innovation in digital finance.
This strategy seeks to keep central bank money at the core of both retail and wholesale financial systems, while providing European actors with the necessary infrastructures to innovate, grow, and remain competitive internationally.