Board Member of ECB about the current status of the digital euro: „We are waiting for the legislative process to be completed. Recent events further underline the urgent need to make progress in this direction.”

The technical preparations and developments will take time, both on our side and for banks and the market. This could take some two or two-and-a-half years from the moment the decision to issue a digital euro is taken, once the legislation is in place. The costs are estimated to be €432 million, including both the infrastructure and the operation of the system for 10-15 years.

An Expansión interview with Piero Cipollone – Member of the Executive Board of the ECB, conducted by Andrés Stumpf.

What is the current status of the digital euro?

We are progressing as planned with our preparation phase, which will come to an end in October this year. We have been working on selecting providers. We’ve carried out the procurement process with potential suppliers and are about to finalise it. We are also developing the rulebook, and we’re working on ways to engage more with users.

In the meantime, we are waiting for the legislative process to be completed. That is a key component.

Are you optimistic?

We know that progress has been made and we hope that the process will be concluded within a reasonable amount of time.

One factor is important: there is a growing sense of urgency. The situation outside the euro area is a source of pressure and demands greater consideration of the risks we face in payments as a result of our fragility and our extreme dependence on foreign providers. I have the impression that this increased sense of urgency has now reached the legislators.

At the European Parliament, President Lagarde argued that the digital euro is a tool of sovereignty. Would you agree with that?

I fully agree with that statement. The digital euro is a structural necessity for the European payments market, irrespective of recent developments in other countries. However, recent events further underline the urgent need to make progress in this direction.

The digital euro is key to reducing our foreign dependence as regards Europeans’ everyday payments. In addition, having more solutions across Europe will make us more competitive, which will lead to lower prices, better services and greater innovation.

At a time of tensions between the EU and the United States, don’t you think that a public initiative designed to compete with US payment systems could cause further friction?

I don’t think so, because it’s logical to think that each jurisdiction should have its own infrastructure that it can rely on. Payments are like water or electricity – essential services that every economy needs to ensure are available. In developing a digital euro, we are not seeking a confrontation with anyone. Implementing a digital euro is something that we should have done irrespective of the circumstances. It is about ensuring the resilience of our economy and that we are the master of our own destiny.

The United States has abandoned plans for a digital dollar and other countries have also put their projects on hold. Why do you think the digital euro should go ahead?

Every country and every region has its particular characteristics. In Europe we are facing specific challenges, like a fragmented payments market and a dependence on foreign solutions. Other countries and regions do not have the same problems and so may not see the same need.

In any case, in the United States, there is a proposal that would allow stablecoins to hold their reserves with the Federal Reserve. This could be marketed as a form of hybrid digital dollar. In fact, some stablecoins present themselves as the world’s digital dollar.

When will people be able to pay with digital euro?

It very much depends on when the legislative process is finalised. The technical preparations and developments will take time, both on our side and for banks and the market. This could take some two or two-and-a-half years from the moment the decision to issue a digital euro is taken, once the legislation is in place.

Do you have an estimate of the cost of the project?

As the legislation is still pending and the procurement phase has not yet been finalised, it is difficult to say what the final cost of the project will be. In the procurement documentation we gave an initial estimate for the elements that will be sourced externally. This was based on market research we had carried out previously. These costs are estimated to be €432 million, including both the infrastructure and the operation of the system for 10-15 years. On top of that there will also be internal development costs, especially for the ledger. The ECB would bear these costs in the same way as it does for the production and issuance of banknotes. And like for banknotes, these costs would be covered by the seigniorage income generated by the digital euro.

The full interview here