Cipollone: two-thirds of euro area card payments use international schemes; digital euro is the fix
Serguey Asael Shinder1 min readECB Executive Board member Piero Cipollone presented the bank's plans for money in the digital age as one strategy in a speech on 6 October (MNI Connect webcast).
The gap he describes. There is still no European digital means of payment that works across all euro area countries and all major use cases, Cipollone said. Two-thirds of euro area card payments rely on international schemes; 13 of the 21 euro area countries have no domestic card scheme. He welcomed a recently announced platform that would let private payment solutions interoperate, but noted that cross-border transactions are only 5% of the market and that interoperability does not expand acceptance at home or add use cases.
Three pieces, one plan.
- Retail: the digital euro. Central bank money for everyday payments, online and offline, usable across the euro area for person-to-person, e-commerce and in-shop payments. The ECB would not deal with customers; banks and other regulated providers would distribute it. Its legal tender status would make it accepted wherever digital payments can be made. The Eurosystem would bear the core infrastructure costs and charge no scheme or processing fees; compensation for banks is being settled in the legislative process.
- Wholesale: Pontes, so that central bank money can settle tokenised transactions.
- Ecosystem: Appia, working with the market on the wider digital finance landscape.
Standards. The ECB has signed agreements with the European Card Payment Cooperation, nexo standards and the Berlin Group to reuse established European technical standards, which Cipollone said should keep adoption costs down. Banks could co-badge the digital euro on existing cards and apps.
The stated risk. Without a digital form of cash, he said, the role of public money may keep declining, and tokenised finance on closed, incompatible platforms could weaken "the singleness of money".