- According to an ECB exec, the digital euro provides a payment rail that could reduce Europe’s reliance on foreign providers like Visa and Mastercard.
- The digital Euro project is an attempt to modernise central bank money by creating an equivalent to cash.
- The ECB plans to launch the digital euro by 2029 and make it mandatory for merchants who already accept digital payments.
Tensions in geopolitics are turning payment systems into tools for political pressure. This problem has forced an European-controlled method of payments to become a necessity. To this end, European Central Bank board member Piero Cipollone argued that the proposed digital euro is simply public money in digital form.
The ECB exec says that it will complement physical cash while fixing a payments system that is close to breaking apart.
The Case for a Digital Euro
According to Cipollone, as e-commerce grows, cash usage is falling across the euro area. In 2024 alone, cash accounted for only 24% of day-to-day transaction value. This is also an interesting drop from 40%, only five years ago.
Lately, world events have been showing that financial tools can be turned into weapons and these tensions are reinforcing the need for a retail payment system that is fully under European control.
Europe is preparing for the future with the digital euro, designed to support the economy and the payments system, Executive Board member Piero Cipollone tells @el_pais. Rising geopolitical tensions reinforce the case for a European digital means of payment… pic.twitter.com/VrfhEEyxXB
— European Central Bank (@ecb) January 28, 2026
Cipollone says that this system must rely on European technology and infrastructure. As of writing, many European countries currently depend on providers from outside the continent.
Cipollone pointed to the International Criminal Court as a recent example of these issues, where some judges had their US-issued cards blocked due to sanctions. This limited their ability to pay for basic goods across Europe, because they relied on Visa and Mastercard.
However, if a digital euro were in place, those users could have continued to pay without interference.
Because of this, Cipollone says that Europe cannot afford too much dependence on foreign payment platforms.
An even more interesting statistic is how today, 13 out of 20 euro area countries have no domestic payment system of their own. They currently have to choose between physical cash or international cards, and this issue makes the region open to external influence.
A Unified Standard for the Digital Euro
The project is aimed at creating a single open standard for all merchants. This means that any business that currently accepts digital payments will have to accept the new currency.
This mandatory status makes sure that people can use the asset everywhere, from German supermarkets to small French bakeries.
Introducing this common layer will also help banks and fintech firms innovate. This way, instead of building separate systems, they can use the central bank infrastructure.
This approach will lower costs for everyone involved and merchants will see lower fees because the ECB provides the underlying rails.
Some critics have also suggested making the currency offline only. However, Cipollone rejects this idea because it fails to solve the e-commerce problem. One third of all payments now happen online and public money must be available where people actually spend it.
A Plan To Modernise Cash
Banknotes and coins are not going away anytime soon. The central bank understands this and is even supporting laws to protect the right to pay with cash.
However, physical money cannot be used for online transactions or sending money to friends. The digital euro fixes this problem by offering a cash-like experience on a smartphone.
Under the new system, the value of this digital Euro will always be constant and one unit will always equal one physical euro coin. It is also not a crypto asset because a central institution backs and manages it.
As such, the value will remain stable even during market volatility.
The Incoming 2029 Launch
The timeline for this project is becoming clearer and European legislators expect to finalise the necessary laws this year.
JUST IN: 🇪🇺 The EU Council has approved the proposal for a Digital Euro, allowing the ECB to move forward with a government-backed digital currency for everyday payments. pic.twitter.com/HwnO5UMjWl
— Real World Asset Watchlist (@RWAwatchlist_) December 24, 2025
Moreover, if the legal framework is ready, the bank will start a pilot program by mid-2027 with real-world transactions to make sure that the system is stable.
The product is expected to fully roll out by 2029 and this date gives the banking sector enough time to prepare its systems.