ECB sees a need to catch up

63 countries are already testing digital central bank money

(Bild: anttoniart - stock.adobe.com)

ECB Director Piero Cipollone sees the need for a digital euro in the future in times of changing payment habits. At present, digital central bank money is already being used, developed or researched for a wide range of users in around 63 countries.

The Italian said this on Friday at a financial conference of the Oesterreichische Nationalbank (OeNB) in Vienna. Meanwhile, large private-sector payment solutions are gaining ground worldwide.

Trump wants to appeal to Bitcoin fans
"Some nations may even aim to use crypto-assets. US presidential candidate Donald Trump, for example, is promising to make the US a Bitcoin superpower," said Cipollone.

In this highly dynamic environment, Europe cannot afford to stand still: "With the digital euro, we would make central bank money fit for the digital world and thus preserve our monetary sovereignty in the digital age," said Cipollone.

The ECB is committed to ensuring that people in Europe will still be able to use cash in the future: "However, we cannot stand idly by and accept that private individuals cannot use central bank money for their everyday digital transactions," he added.

Private providers are gaining ground
European payment service providers are finding it increasingly difficult to keep up with international card systems and electronic payment solutions: Apple Pay, for example, has massively expanded its reach in Europe and secured a share of the interchange fees, which represents a significant cost item for the issuing banks: "As a result, banks run the risk of not only missing out on interchange fees, but also customer relationships and user data," said Cipollone.

The digital euro would be a uniform, simple, secure and generally accepted public solution for digital payments in stores, on the internet and between people. According to Cipollone, it would be available both online and offline and could be used free of charge for simple payment transactions. The Bundesbank does not expect a digital version of the common currency to be introduced in the eurozone until 2028/29 at the earliest. Bundesbank Executive Board member Burkhard Balz is a member of the European Central Bank's task force on the digital euro.