- SPEECH
Keynote speech by Piero Cipollone, Member of the Executive Board of the ECB, at the eighth International Conference of Regional Card Schemes and Retail Financial Market Infrastructures
But to do this, it must be trusted. It must allow people and businesses to transact safely and efficiently. And it must evolve with geopolitical and technological developments.
For centuries, central banks have issued money and safeguarded its value. That mandate remains unchanged. But the environment in which money is used is being transformed.
People are increasingly paying digitally. Tokenisation could reorganise the financial value chain. New solutions are being considered to enhance cross-border payments. And geopolitical fragmentation is making the resilience and governance of critical infrastructure ever more important.
Central banks must therefore ensure that the money they issue remains fit for the future.
This does not mean replacing the private sector or predicting which technology will prevail. It means providing a trusted public foundation for payments and finance on which private innovation can flourish. And it means preventing digitalisation from increasing fragmentation or creating new dependencies.
This is why the Eurosystem has adopted a comprehensive payments strategy.[1]
The strategy has four objectives: ensuring that central bank money can continue to settle retail and wholesale transactions as preferences and technologies evolve; strengthening Europe’s resilience and strategic autonomy; fostering an integrated, competitive and innovative payments ecosystem; and supporting the international role of the euro.
In other words, we are seeking to comprehensively upgrade money and payments in Europe.
The Western Balkans are also taking active policy steps to enhance and integrate payments in the region. Several countries, including Albania, have already joined the Single Euro Payments Area. And a clone of the Eurosystem’s fast payment system (TIPS), developed by Banca d’Italia, is already fully operational in Bosnia and Herzegovina and Montenegro and will soon be launched in Albania, Kosovo and North Macedonia. It allows real-time, low-cost domestic transactions in local currencies around the clock, every day of the year.
This represents real, tangible progress that people will benefit from in their daily lives.
But we must always think one step ahead.
So today, I will discuss four key initiatives we are working on.
We are making it possible to settle tokenised asset transactions in central bank money and creating the conditions for an integrated and innovative tokenised finance ecosystem.
And we are interlinking fast payment systems to make cross-border payments faster and more efficient.
These initiatives have a common goal: ensuring access to safe public money while creating space for private innovation and international cooperation.
Modernising euro banknotes
Let me begin with the most familiar form of central bank money: cash.
In discussions about digitalisation, cash is sometimes talked about as a technology of the past. That is a mistake. In an age where cyber risks, hybrid threats and system outages make the headlines, cash remains the most resilient form of payment we have.
More than 31 billion euro banknotes, worth over €1.6 trillion, are in circulation. People do not just see cash as a means of payment; they also view it as a store of value and a safeguard in periods of uncertainty. And it is one of the most tangible symbols of European unity.
Moreover, cash is inclusive and simple to use, as it does not require a device or an intermediary. It protects privacy. And, most importantly, it gives people freedom of choice.
That is why Europe is not choosing between cash and digital payments. We are investing in both.
The Single Currency Package reflects this approach.[2] Alongside the proposed Regulation on the establishment of a digital euro, it includes a proposed Regulation on the legal tender status of euro banknotes and coins. The European Parliament and the Council of the European Union have adopted their respective positions, and the interinstitutional negotiations are under way.
But protecting cash is not enough. We must also prepare it for the future.
The next generation of euro banknotes will incorporate enhanced security features, have a smaller environmental impact and improve accessibility. We also want Europeans to feel that their banknotes reflect the cultural identity and natural environment they share.
This summer, almost ten million people shared their views in a public survey on the ten shortlisted design proposals. Two-thirds of the responses came from people under the age of 35.[3]
This remarkable level of participation shows that Europeans continue to care deeply about their banknotes.
The ECB’s Governing Council expects to decide on the final design concept around the end of this year. The future euro banknotes should enter circulation gradually from the early 2030s, while existing banknotes will remain valid.
So the future of public money will remain physical.
Preparing a future-ready digital euro
Today, central bank money is only available to the public as cash. But physical cash cannot be used online or for the ever-growing range of digital transactions.
Europe also lacks a digital solution that can be used for everyday payments across the euro area. Digital payments remain fragmented along national lines and use cases. And we have a strategic dependency: 13 euro area countries rely entirely on non-European companies for in-store card payments.
The digital euro would remedy this situation.
It would be a digital form of cash issued by the Eurosystem, available and accepted throughout the euro area. It would complement banknotes and coins, not replace them. It could be used in shops, online and between individuals.
It would work both online and offline. Basic use would be free for consumers. And we are designing it to provide high levels of security, privacy, accessibility and resilience.
The offline functionality would allow payments to be made without an internet connection. It would also offer cash-like privacy, as the personal transaction details would be known only to the payer and payee. For online transactions, the Eurosystem would not know the individuals involved in the payment.
The digital euro would therefore preserve people’s freedom to pay with central bank money as the economy becomes more digital.
But it would do more than provide another payment option.
It would create a common public infrastructure and acceptance layer for European payments. Payment service providers could build on that infrastructure and use the digital euro’s open standards to offer services throughout the euro area.
The digital euro would help private European payment solutions expand beyond their current geographical and functional boundaries. It would lower investment costs and allow providers to focus investment on customer-facing innovation.
And beyond the euro area, the digital euro standards and rulebook could provide a useful blueprint for countries that are considering developing a domestic scheme for digital payments. This would facilitate interoperability with the digital euro in the future.
The objective of the digital euro is not to displace private payment solutions. On the contrary, it will provide a common foundation on which the private sector can compete, innovate and achieve European scale.
Banks and other supervised payment service providers would remain the main point of contact for users. They would distribute the digital euro and provide customer services. The Eurosystem would not charge scheme or processing fees. This will generate savings for banks, merchants – especially small ones – and ultimately consumers.
We are also designing safeguards to ensure that the digital euro functions as a means of payment rather than a form of investment. It would not be remunerated, and individual holdings would be limited. But this would not restrict transactions: a waterfall system with a linked bank account would ensure that amounts above the holding limit can be sent or received.
Where the project stands
The legislative process is advancing. The Council of the EU agreed its position in December 2025, the European Parliament adopted its position in July 2026 and the trilogue negotiations are now under way. The European Council has called for the negotiations to be concluded by the end of this year. Assuming the legislative process is concluded by the end of 2026, we aim to be ready for a potential first issuance in 2029.
But technical preparations must advance in parallel.
The digital euro pilot is planned to start in the second half of 2027 and will run for 12 months. We have selected 36 payment service providers from across the euro area following a call that attracted more than 50 applications.[4] Preparatory work is well under way.
The objective is not simply to test technology. A payments system is an ecosystem comprising service providers, merchants, central banks, infrastructure operators and users. The pilot will allow the members of this ecosystem to test the design of the digital euro, learn from experience and identify improvements.
On 15 September we launched a call inviting e-commerce and mobile-commerce merchants to take part in the pilot. The selected merchants will test customer payment journeys, assess integration with existing checkout systems and provide feedback on the user experience.[5]
The digital euro is not merely a fix for existing shortcomings in the euro area payments landscape. It is a solution for the future. It will provide a platform to innovate and enhance the quality and breadth of payment services. New opportunities are arising. We want to make sure that European payment service providers are in the best position to seize them and gain a strong competitive edge.
Against this backdrop, we recently launched a new wave of activities through the digital euro innovation platform, building on a first wave that involved around 70 market participants.[6]
One workstream will experiment with integrated electronic receipts, payments involving multiple payers or recipients, conditional payments and new features offered through payment apps.
A second workstream will look further ahead, exploring developments that could enhance the digital euro in future releases. This includes possible applications of artificial intelligence, such as AI agent-enabled payments or micropayments, and possible uses of a digital euro in interactions with public services, for example when paying for transportation, mobility and parking services.
We cannot know precisely how Europeans will want to pay 20 years from now. But we can build a foundation that is open to innovation, robust enough to earn public trust and able to evolve with users’ needs.
Pontes and Appia: supporting tokenised finance
Our third initiative concerns digital finance.
By allowing assets to be represented as digital files, tokenisation could change how they are issued, traded, settled, held and serviced.
Today, these activities often take place across separate infrastructures and ledgers. Tokenisation could bring them into a shared digital environment, allowing smart contracts to automate processes and generating efficiency gains that could reduce costs and lower the barriers for smaller firms to access finance.
But market participants have been clear that tokenised finance needs a safe settlement asset. Private instruments such as stablecoins and tokenised bank deposits can play useful roles. But central bank money provides risk-free final settlement and a common reference that private forms of money can be converted into at par. It ensures that one euro remains one euro, no matter its issuer, form or underlying technology.
Pontes: an operational bridge
The Eurosystem launched Pontes on 21 September.
Pontes connects market distributed ledger technology (DLT) platforms with the Eurosystem’s TARGET Services, enabling wholesale transactions in tokenised assets to be settled in central bank money.
It builds on the Eurosystem’s exploratory work in 2024, in which 64 participants conducted more than 50 trials and experiments and settled almost €1.6 billion in central bank money. That work demonstrated the feasibility of central bank money settlement for DLT-based transactions and confirmed strong market demand for a risk-free settlement asset.
Pontes is now live with an initial group of market participants and DLT operators. On Monday, Pontes settled a €1 billion transaction in benchmark bonds successfully issued on DLT by the European Stability Mechanism.[7] Many other national and supernational institutions, including the World Bank, are preparing to issue on DLT and possibly settle in Pontes. Current Pontes services will be expanded gradually, with enhanced features, such as immediate settlement finality on the Eurosystem DLT platform and longer operating hours, being introduced as we move towards 24/7/365 availability in 2028.
Pontes provides a dependable settlement foundation for tokenised securities and helps connect private tokenised settlement assets to central bank money.
Appia: designing an integrated ecosystem
With tokenisation, we have an opportunity to create an integrated market for digital assets from the outset, which would help address the fragmentation of Europe’s capital markets. But technology does not guarantee integration. It could instead produce incompatible platforms, closed networks and fragmented pools of assets and liquidity.
For assets and services to interact across platforms, common standards are needed. Liquidity and collateral must be able to move. And the legal framework must provide clarity on issues such as ownership, settlement finality, custody and smart contracts.
That is why we launched our Appia project.
Appia addresses the architecture, standards and governance of a European tokenised financial ecosystem. It combines analysis, experimentation and public-private cooperation with the aim of delivering a blueprint in 2028.[8]
The market is actively contributing to this work. The public consultation on the Appia roadmap received 127 responses, and 90% of respondents made at least one proposal to contribute.[9]
Pontes and Appia are therefore two parts of one strategy.
Pontes provides a bridge that makes it possible to settle DLT-based transactions in central bank money, while Appia is designing the digital finance ecosystem of tomorrow.
Interlinking fast payment systems
Our fourth initiative concerns cross-border payments.
Domestic payments have become dramatically faster. Yet international payments often remain slow, expensive and opaque. High costs reduce the value of remittances. And long payment chains complicate trade, particularly for smaller businesses.
Our approach is to connect the fast payment systems that central banks and the private sector have already built. This will help lower the cost of payments and make them faster.
TIPS, the Eurosystem’s instant payment settlement service, settles payments in central bank money around the clock. It already supports the euro, the Swedish krona and the Danish krone, with the Norwegian krone and Icelandic króna set to join in the coming years. Its cross-currency service has been available since October 2025.
In July the Central Bank of Bosnia and Herzegovina and the Central Bank of Montenegro successfully launched a platform for the settlement of instant payments, which uses TIPS technology. The number of transactions is increasing each day: on Monday it was already close to 30,000 transactions per day. Albania, Kosovo and North Macedonia are expected to join soon, bringing all countries participating in the initiative onto the platform. This will help to modernise payments in the region and support its integration.
We are now working to connect TIPS with payment systems globally.
Interlinking enables fast payment systems to communicate. People can continue using their existing bank and payment arrangements, while transfers reach beneficiaries connected to another jurisdiction’s system.
This can shorten payment chains and reduce costs. It also respects monetary sovereignty because participating jurisdictions retain control of their currencies and domestic infrastructures.
Interlinking therefore offers a practical model of international cooperation: strengthening connections without surrendering sovereignty.
Work is advancing on a bilateral link with India’s Unified Payments Interface, the largest fast payment system in the world by transaction volume. We are also examining a potential connection to Nexus Global Payments, which will connect fast payment systems in South-East Asia, and exploring links with the instant payment systems of Switzerland and Brazil. Last week, the leaders of EU and Canada also indicated that they would support work towards connecting instant payment systems to facilitate faster, lower-cost and more seamless transactions across the two economies.[10]
As for the Western Balkans, at least two tracks can be envisaged: the first and most straightforward is full integration in the EU. In that case the reference model would be Sweden and Denmark until the eventual adoption of euro. The alternative would be exploring possible interlinking with TIPS, once the business case justifies the investment. In any case, the TIPS clone should by its very nature already support integration, as payment services providers operating in both the euro area and the Western Balkans will be using two platforms that are technically very similar. This would make it easier for them to provide traditional correspondent banking services.
Conclusion
The four initiatives I have presented today are different dimensions of the same transformation. We are making sure that central bank money remains fit for purpose as preferences, technologies and the geopolitical landscape evolve.
Modernising banknotes ensures that public money remains tangible, inclusive and resilient.
The digital euro would make public money available for digital payments and create a European infrastructure that private payment service providers can use as a platform for innovation.
Pontes and Appia ensure that central bank money remains the settlement anchor as financial markets adopt tokenisation.
And interlinking fast payment systems connects jurisdictions while respecting their monetary sovereignty.
The future of money will not be defined by a single instrument or a single technology. It will involve physical and digital money, public and private solutions, and domestic and cross-border infrastructures. It will be shaped by the choices we make about trust, openness, resilience and sovereignty. These choices will determine whether Europe can once again be a cradle of monetary innovation.
Our responsibility as central banks is to ensure that these elements form a coherent, trusted and resilient monetary system.
We cannot merely observe the transformation of money from the sidelines. We have a duty to shape it in the public interest.
ECB (2026), The Eurosystem's comprehensive payments strategy.
European Commission (2023), “Single Currency Package: new proposals to support the use of cash and to propose a framework for a digital euro”, press release, 28 June.
ECB (2026), “Almost ten million people took part in ECB survey on new euro banknotes”, press release, 23 September.
See ECB (2026), “ECB selects 36 payment service providers to join digital euro pilot”, press release, 14 July and the digital euro pilot web page.
See ECB (2026), “Call for online and mobile merchants to participate in digital euro pilot now open”, MIP news, 15 September.
See ECB (2026), “Call for expressions of interest in a new wave of digital euro innovation platform activities”, MIP news, 28 September.
European Stability Mechanism (2026), “ESM raises €1 billion with sale of first digitally native bond”, press release, 26 October.
ECB (2026), Appia – paving the way for a future-ready, integrated financial ecosystem leveraging tokenisation and DLT, 11 March.
ECB (2026), Eurosystem report on the public consultation on the Appia Roadmap, 28 October.
Council of the European Union (2026), EU-Canada Summit 2026 Joint Statement – Building together an Alliance for the Future, 30 October.
European Central Bank
Directorate General Communications
- Sonnemannstrasse 20
- 60314 Frankfurt am Main, Germany
- +49 69 1344 7455
- [email protected]
Reproduction is permitted provided that the source is acknowledged.
Media contacts