ECB renews digital euro push, citing reliance on foreign card networks

The European Central Bank has restated its case for a digital euro as a way to loosen Europe’s reliance on payment companies headquartered outside the region, according to Crypto.news. In an October 24 interview with Italian financial newspaper Milano Finanza, ECB Executive Board member Piero Cipollone compared payments to energy and defense as services Europe cannot leave entirely to outside suppliers.

He said Europe has learned in recent years that some essential services cannot depend only on third parties, while stressing that payment sovereignty is not about shutting out international providers. The goal, he said, is to give consumers and businesses another option running on infrastructure controlled inside Europe.

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What the ECB is proposing

The digital euro would work offline, letting two devices complete a payment by being brought close together, much as contactless cards do now. That would cover power outages and areas with poor connectivity, and transaction details would stay between payer and recipient. Banks would still handle identity checks and required compliance work for online payments, and customers would reach their digital euros through existing banking apps or a separate Eurosystem app.

Wallets would have holding limits intended to protect financial stability, particularly during periods of banking stress. Spending would not be capped: if a purchase exceeded the wallet balance, the remainder could be pulled automatically from a linked bank account.

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The ECB has also signed agreements with European standards bodies to reuse existing payment specifications, which it expects to reduce the build-out banks and merchants need. The central bank says security would rely on encryption, separation of sensitive data and regular simulated cyberattack tests, with infrastructure spread across several European regions so service continues if one part fails.

Pilot and legal timing

The pilot will have ECB and 19 national central bank employees transacting on a beta version of the digital euro, testing person-to-person transfers, in-store purchases and online and mobile shopping. The beta will not have legal tender status. Merchants were invited to apply, with the window closing October 27.

Issuance remains a political decision as much as a technical one. The Governing Council cannot act until the legislative process finishes, and banks, payment providers and merchants would still need time to adapt their systems.

The ECB has separately opened testing covering artificial intelligence agents, micropayments and conditional transactions, after more than 70 operators took part in earlier innovation programs that examined automatic digital receipts and payments released when an online order is delivered. Cipollone said the digital euro would sit alongside cash and existing bank services rather than replace them.

Why it matters

The proposals put fee setting and infrastructure control in European hands at a time when card networks, online checkout and in-store terminals in many euro-area countries depend on foreign providers. Merchants with little bargaining power stand to gain the most from regulated fee caps, while banks keep the customer relationship and the compliance burden. For crypto users, the design choices matter: holding limits and identity checks mean the digital euro is a central bank liability, not a private token.

What to watch

The decisive near-term marker is whether European legislators adopt the digital euro regulation by the end of 2026. Approval would keep the 2029 launch timeline in play; slippage would push the Governing Council’s issuance decision and the 2027 pilot’s follow-through.

Source: crypto.news