Interview with Milano Finanza
The ECB’s Fabio Panetta outlines the digital euro’s role in reducing Europe’s reliance on non-European payment systems and ensuring monetary sovereignty.
Fabio Panetta, ECB Executive Board member, discussed the digital euro during an interview, noting that tokenisation was the primary focus at a recent Italian Banking Association meeting. He provided an update on legislative progress in Brussels and internal Eurosystem preparations for the digital euro, highlighting its strategic importance for Europe’s payment infrastructure. Panetta emphasized that payments are a critical public service, and the ECB’s mandate includes ensuring their smooth operation to prevent broader economic disruptions.
The digital euro aims to address the growing gap in digital payments, where cash cannot be used, while maintaining the privacy and universal acceptance of cash. Panetta pointed to Italy’s online payment growth—from 6% in 2019 to 24% in 2024—as evidence of the need for a European alternative to non-European card schemes, which dominate both online and in-store transactions in many euro area countries.
Panetta framed the digital euro as a project to enhance European digital sovereignty, reducing dependence on third-party payment systems. He compared the necessity of domestic alternatives in payments to those in energy and defense, stressing that sovereignty means having the power to choose rather than excluding others. The digital euro would offer a secure, privacy-preserving public money option accepted across the euro area.
A pilot phase for the digital euro is planned for 2027, involving real transactions by ECB and national central bank staff to test technology and refine the system. Panetta noted that 36 market operators, including seven Italian firms, are already collaborating, with calls for e-commerce and mobile commerce operators to join. If regulations are approved in 2024, the digital euro could launch as early as 2029, pending a formal ECB Governing Council decision.