Digital euro to provide retail payments backbone Europe needs, ECB's Cipollone says
FILE PHOTO: Piero Cipollone, deputy governor of the Bank of Italy, poses in Rome, Italy, 2015, in this handout picture. Banca d'Italia's official website/Handout via REUTERS/File Photo
MILAN, Jan 29 : The euro zone needs to be self-sufficient in handling payments and the digital euro will provide the necessary infrastructure for retail transactions, European Central Bank Executive Board Member Piero Cipollone said on Thursday.
The ECB is working on a digital version of the single currency to maintain the central bank's core role in an increasingly digital economy and defend the euro zone's monetary sovereignty.
Speaking remotely at a conference in Italy, Cipollone said the digital euro scheme, together with two other projects the ECB is working on for wholesale payments, will give the euro zone the tools it needs "to keep its house in order."
"That can give (the euro zone) more strength," he said, when asked if the digital euro could boost the currency bloc's position vis-a-vis the United States.
The ECB is betting the digital euro, which euro zone residents will be able to use both in shops and online, will help counter the spread of stablecoins, digital assets which are pegged mainly to the U.S. dollar.
"Stablecoins only pose a danger if the payments system in Europe can't meet users' needs," Cipollone said. "If we cover all use cases I don't see why people should go for a rather more complex option."
The ECB's decision to structure the digital euro to provide both wholesale and retail payments services in online and offline mode, has been criticised by some for potentially putting it in direct competition with commercial lenders.
But Cipollone said the ECB's scheme would build the single payments infrastructure the euro zone lacks at the moment, while keeping commercial banks central to the payments system, retaining sole access to their clients' payments data.
Banks will provide the digital wallet where people keep their digital euros, Cipollone said, and payments can be made through an application on users' mobile phones.
