ECB's Cipollone: Digital euro shields banks from fee, data loss
The ECB must introduce a digital euro to prevent European banks from losing crucial payment data, retail deposits and fee revenue to foreign payment networks and stablecoins, according to executive board member Piero Cipollone.
The European Central Bank is positioning the digital euro as a critical defence for commercial lenders facing an erosion of their payment businesses. Speaking in Rome on July 17, ECB executive board member Piero Cipollone warned that the shift toward app-based payments is stripping banks of both revenue and the transaction data needed to underwrite loans.
The migration away from traditional debit cards carries tangible financial costs. Mobile payments, which already exceed one in ten point-of-sale transactions in Ireland, the Netherlands and Finland, typically force banks to pay higher processing fees than standard debit transactions. Furthermore, lenders often receive no data from these mobile payments, degrading their ability to assess client creditworthiness. Should stablecoins gain wider adoption, Cipollone noted, banks stand to lose retail deposits entirely.
The stakes extend beyond individual bank balance sheets to European financial sovereignty. Non-European schemes currently process two-thirds of card payments in the euro area, a share that is increasing. Thirteen of the 21 euro area countries lack a national card scheme, and more than half have no domestic e-commerce payment solution. This heavy reliance on foreign infrastructure raises serious questions about the resilience of the bloc's payment systems.
A digital euro would function as public money distributed by commercial banks. Because it would hold legal tender status, any merchant currently accepting digital payments would be required to accept it at full face value. Users could spend it for free across the euro area in shops, for e-commerce, and in person-to-person transfers, both online and offline.
Cipollone highlighted that the digital euro would rely on open standards. This allows existing national payment solutions to scale across the bloc without forcing merchants to adopt new technical systems. Banks could also co-badge the digital euro with existing debit cards, routing transactions through European infrastructure instead of international card networks.
The system will include an offline mode, allowing consumers to load small amounts onto a digital wallet and settle payments directly between devices in areas with poor connectivity. This offers privacy levels comparable to physical cash. For smaller lenders, preserving access to payment data is essential to maintaining local lending relationships, as credit allocation relies heavily on this information.
