Цифровой евро: Суверенитет Европы в условиях растущей геополитической нестабильности Translation: Digital Euro: Europes Sovereignty Amid Growing Geopolitical Instability

The increasing geopolitical strain is reinforcing the stance of advocates for establishing a European digital payment system under local control. This was asserted by Piero Cipollone, a member of the executive board of the European Central Bank (ECB), in an interview with El Pais.

He described Central Bank Digital Currency (CBDC) as «government money in virtual form,» necessary for complementing cash and addressing the fragmentation of the payment landscape in the region.

The official presented specific data: in 2024, the share of fiat currency in everyday transactions fell to approximately a quarter (24%), significantly lower than the 2019 figure (40%).

According to him, this situation compels the ECB to evolve its methods of providing citizens in the eurozone with money as a public good.

Cipollone directly linked this task to the geopolitical context. He warned that the «instrumentalization of any potential resource» and rising global tensions heighten the need for a European retail payment system built on local technologies and infrastructure.

Such a system should be capable of meeting all of Europe’s payment needs without creating an «excessive dependence» on foreign schemes, as the ECB president believes.

He also emphasized the status of the digital euro as a legal means of payment. Cipollone stated that any seller already accepting digital payments «will be required to accept» this new form, effectively implying a mandatory regime for transactions in CBDC.

Cipollone dismissed proposals to postpone the project while awaiting a purely corporate solution, reminding that «the ECB has been calling on the private sector for years to develop a Europe-wide solution,» which has yet to materialize.

He is convinced that launching the digital euro with a single open standard, obligatory for acceptance by all merchants, will not crowd out private companies. On the contrary, this will incentivize banks and fintech firms to create a truly European payment infrastructure.

Cipollone also opposed the idea of restricting the digital euro to an offline format. He stated that one of the key goals of the project is to address the lack of a European alternative for online payments in e-commerce.

His comments followed an open letter from January 11, signed by 70 economists and politicians, urging EU lawmakers to «prioritize public interests» concerning the digital euro.

Additionally, they warned that further delays would only increase Europe’s dependence on dominant foreign and private payment systems.

Currently, the ECB is engaged in preparatory work on the digital euro project: developing a framework of rules, technical architecture, and functionality before making a final decision on issuance.

According to the regulator’s definition, the CBDC design represents a public, Europe-wide payment solution that ensures seamless access to central bank money, akin to cash. To maintain financial stability, measures such as storage limits and differentiated rewards will be implemented.

The project aims to strike a balance between innovation, privacy, and preserving the crucial role of banks as intermediaries in the retail payment system, noted ECB Executive Board member Philip Lane in January.

However, several commercial banks and politicians have criticized the digital euro. They are concerned about the potential displacement of deposits, operating costs, and uncertain demand from retail users.

In March, ECB analysts concluded that eurozone citizens are not interested in the virtual form of the European currency and do not see much value in CBDC.

It is worth noting that a payment system failure at the ECB in March raised new doubts among lawmakers regarding the regulator’s ability to implement the national digital currency project.