European Central Bank Executive Board member Piero Cipollone has described the digital euro project as a means to strengthen the euro area’s control over critical payments infrastructure. In an interview published by the central bank, he argued that dependence on external providers creates operational risks similar to those previously encountered in energy and defense.

Cipollone stated that Europe has learned it cannot rely solely on third parties for essential services. “In recent years Europe has learned that, for some essential services, we cannot rely only on third parties. We saw this with energy and we’re seeing it today with defense. And the same is true for payments,” he said.

He added that the smooth operation of payment systems forms part of the ECB’s responsibilities. Critical dependence on outside actors makes consistent performance more difficult to guarantee. Sovereignty in this context does not require excluding third-party providers. “It means having the power to choose and knowing that, for an essential service like payments, Europe can also rely on its own strength,” Cipollone explained.

Pilot Plans and Market Involvement

The ECB plans a pilot phase for 2027 that will involve real transactions carried out by staff from the ECB and national central banks. Thirty-six market operators are participating in preparations, including seven from Italy. The central bank is also inviting e-commerce and mobile-commerce operators to join the testing process.

The digital euro is conceived as electronic central bank money available for both online and offline use across the euro area, operating alongside physical banknotes and coins. It has not yet been issued. Current payment systems remain fragmented across euro-area countries, and a common public instrument could address that fragmentation.

Earlier Concerns Over Card Payments

In an April public lecture in Latvia, Cipollone noted that two-thirds of euro-area card transactions are governed by non-European companies. He presented this reliance as a strategic vulnerability that a European-controlled digital euro could help reduce by providing infrastructure under regional oversight.

The pilot is intended to move beyond simulation and test practical integration points for merchants and everyday payment flows. Results from the operational phase are expected to inform further decisions once legal conditions are met.

Legislative Path and Timeline

The ECB Governing Council cannot decide on issuing a digital euro until legislative negotiations in Brussels are completed. Cipollone expressed hope that the required regulation will be adopted by the end of 2026. Approval would enable the Governing Council to take a formal decision on issuance, with the first possible rollout as early as 2029.

Technical progress through the pilot therefore remains conditional on the outcome of the political and legal process. Market participants are tracking both the operational testing and the pace of regulatory talks in Brussels as the key factors determining the project’s next steps.