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- European Central Bank Executive Board member Piero Cipollone warned Europe could face fragmented payment and tokenized finance systems.
- Two-thirds of euro area card payments rely on international schemes, and 13 of 21 countries lack a domestic card network.
- A 12-month digital euro pilot involving 36 payment service providers is scheduled to begin in the second half of 2027.
European Central Bank Executive Board member Piero Cipollone has warned that Europe could end up with fragmented payment and tokenized finance systems if central bank money does not keep pace with digital finance.
Speaking on Oct. 6, Cipollone said Europe still lacks a digital payment option that works across the euro area for everyday transactions. The ECB sees a digital euro as one way to provide common infrastructure while reducing reliance on payment systems controlled outside Europe.
Two-Thirds Of Euro Area Card Payments Rely On International Schemes
Cipollone said two-thirds of card payments in the euro area currently rely on international schemes. Thirteen of the 21 euro-area countries have no domestic card network.
The digital euro would operate alongside cash and private payment services. Banks and other regulated providers would distribute it and manage customer relationships, while the Eurosystem would provide the core infrastructure.
The planned system would support person-to-person transfers, online purchases and payments in physical shops, with both online and offline functionality.
ECB Warns Closed Tokenized Networks Could Fragment Liquidity
Cipollone also linked the digital euro debate to the growth of tokenized finance, warning that closed and incompatible platforms could divide liquidity into separate settlement pools.
The ECB is addressing that risk separately in wholesale finance through initiatives including Pontes and Appia, which are designed to connect distributed ledger platforms with central bank settlement infrastructure and develop standards for tokenized markets.
Digital Euro Pilot Starts in Second Half Of 2027
EU lawmakers are still negotiating the legislation needed for a digital euro. The Council agreed its position in December 2025, while the European Parliament adopted its position in July 2026. The ECB will decide whether to issue the currency only after legislation is adopted.
If negotiations conclude by the end of 2026, the central bank aims to be ready for a possible first issuance in 2029. A 12-month pilot involving 36 payment service providers is scheduled to begin in the second half of 2027.
