The digital euro: what’s in it for you?
Author: Piero Cipollone (ECB)
As they juggle various cards, apps and devices, most Europeans find that digital payments have fallen short of their promise to provide a convenient euro area-wide solution. The ECB’s Piero Cipollone explains how a digital euro would blend the simplicity of cash with digital convenience.
Twenty-five years ago, the introduction of the euro transformed Europe. For the first time, people in different countries were using the same banknotes and coins. Who would have thought that the contents of our wallets could connect us all?
Since then, euro banknotes have simplified life for European families, merchants and travellers alike. No more additional fees or wondering if your payment method will be accepted. But in today’s digital age, that ease is fading.
Most Europeans now juggle different cards, apps and devices depending on each payment situation, finding that the convenience of digital payments doesn’t always live up to the promise. In the euro area, we are stuck in a fragmented system, where digital payment solutions don’t cover all our needs. While you might easily use a card to pay contactless for a meal or a taxi ride in cities like Madrid or Paris, rural areas in Germany or Austria often only accept cash or local debit cards. Similarly, some mobile apps work well for sending money to family or friends but aren’t accepted for online purchases or by local businesses.
In a nutshell, we still don’t have a digital payment solution that works effectively everywhere in the euro area in all payment situations. What if we could bring back the universal simplicity of cash, while embracing the convenience of the digital age? A digital euro would allow us to reclaim the freedom to pay digitally, seamlessly, anytime and anywhere – including when shopping online.
A digital euro would go hand in hand with banknotes, providing – for free – an all-in-one digital payment option across the euro area. The fragmentation we experience today could become a thing of the past.
You could easily access your digital euro wallet via the digital euro app, your bank’s app or a physical card to make instant payments. Imagine stopping at a café on your way to work and realising you’ve forgotten your wallet or don’t have enough cash. Or perhaps your card isn’t accepted when you go to pay. With a digital euro, you could pay seamlessly for your coffee by card or smartphone in all those situations, because it would be accepted by all European merchants that already accept digital payments. Think of it like a digital banknote. You’d also be able to use it to pay for things in all euro area countries, making travelling even easier.
The same applies to other everyday payments – whether paying for your children’s babysitter, sending money to your daughter studying abroad or shopping online – and potentially new situations. A digital euro could allow you to pay on delivery, for example, or when/if a train has arrived on time.
A digital euro would also address any concerns about resilience and privacy: using the offline function, you’d even be able to pay without an internet connection. The offline digital euro would provide a robust backup in critical situations like internet outages or in remote locations with limited connectivity, ensuring that your payments are uninterrupted and making our payments system more resilient. Moreover, when using the offline solution, personal transaction details would remain private – they’d only be known to you and the payment recipient, much like a cash payment.
So, what’s in it for you? Pending a final decision on whether to issue a digital euro, which will only be taken by the European Central Bank once European legislators have defined its legal framework, the project promises greater freedom and convenience. You’d be able to make instant payments anytime and anywhere in the euro area, with a single, free solution backed by the highest security and privacy standards.
This is the logical next step for our single currency. It’s time we had a digital euro to complement banknotes and simplify our lives, making our payments sector more cohesive, competitive, innovative and resilient.
I think – and I hope you agree – that’s something worth considering.
About the author
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Piero Cipollone
Piero Cipollone has been a member of the Executive Board of the European Central Bank since 1 November 2023. He is responsible for the Directorate Banknotes, the Directorate General International and European Relations and the Directorate General Market Infrastructure and Payments.
Before joining the ECB, Mr Cipollone was Deputy Governor of the Banca d’Italia and a member of the Board of the Italian Institute for the Supervision of Insurance. He also served as a member of the Coordination Group for the Cross-border payments programme at the Bank for International Settlements. He previously served as an Executive Director on the Board of the World Bank Group.
Mr Cipollone graduated with honours in economics from the Sapienza University of Rome. He holds a Master of Arts in economics from Stanford University and was a visiting scholar at the economics department of the University of California, Berkeley.
Mr Cipollone is the author of several books. His papers have been published in international journals such as the American Economic Review, the Journal of the European Economic Association and the Journal of Policy Modeling.
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