## SPEECH
### Money in the digital age
### Speech by Piero Cipollone, Member of the Executive Board of the ECB,at IstitutoAffari Internazionali
FrankfurtamMain,28May2026
changed. financial institutions explore new technologies, and new players and infrastructures are reshaping how moneyisusedacrosstheeconomy. If central banks want to ensure that money remains stable, trusted and usable, they must helpbring it uptodatewithtechnologicaldevelopments. In contrast, if central bank money does not adapt to technological change, it risks losing relevance in policy response is not to resist digitalisation but rather to extend central bank money into this new
keypartsof theeconomy.Thiswouldweakentheroleofpublicmoneyas ananchorof stability,aswell technological environment while preserving its core attributes: safety, uniformity and reliability.
## Keeping pace with the digitalisation of money and payments
payment systems,and the specific challenges thisraises for the euro area. digitalisation could help reduce costs and speed up cross-border payments, while avoiding the risk of further fragmentation. Policy responses need to be coherent on those three fronts, ensuring that innovation, efficiency and integration advance without undermining financial stability and trust in central bank money. These responses must also reflect the specific conditions in each jurisdiction. In the euro area, we face three main challenges. existssolelyintheformofbanknotesandcoins,whichofcoursecannotbeusedforonline
transactions. As a result, we rely heavily on a few non-European providers for retail payments, and this dependenceclearlyposesarisk.
Second,inwholesalemarkets,mostlarge-valuetransactionsbetweeneuroareafinancialinstitutions bank money does not adapt to tokenisation, which has the potential to transform financial markets. Tokenisation and DLT promise to make capital markets more efficient. Yet without tokenised central bank money at its core, the new ecosystem would rely on fragmented pools of settlement assets. further increase fragmentation in this area. For a highly open economy like the euro area, where externaltradeaccountsforaroundhalfofGDP,thisisasignificantconcern.
### Modernising centralbankmoney
1 First, we are getting ready to potentially issue a digital equivalent of cash: the digital euro. Second,wewill make it possibletosettleDLT-based transactions incentralbank money as of September thisyear. transactions. remainsarisk-freesettlementassetandafoundationoftrustonwhichtheprivatesectorcaninnovate anddevelop. Private payment solutions can bring efficiency, new functionalities and customer-facing advancements. Theroleofcentral banks isnottoreplace theprivatesector.Instead,wemustensurethatpublic moneycontinuestoanchorthefinancialsystemastechnologyevolves.Intheeuroarea,weare applying this principle across theboard.
### Adigitaleuroforretailtransactions
Digitalisation is transforming the way households and firms make everyday payments, yet access to central bank money remains confined to cash. This raises a vitally important question: how can public The digital euro is intended as a digital form of cash for day-to-day use in retail payments. The objective is not to replace physical cash orprivatepayment solutions. Instead,we want to complement throughout Europe. part of a broader public-private payments ecosystem. It will not yield interest, and individual holdings willbecappedtopreservefinancialstabilityandensurebankscontinuetoprovidecredittothe economy.2 We are convinced that people should always have access to a public option to pay digitally, wherever they are in the euro area- the digital euro can make this a reality. It will be available both online and offline,supporting resilience and protectingprivacy.And,by helping to reducereliance on a few The digital euro will also have legal tender status, and common standards adopted by virtually all points of sale across the euro area will facilitate its acceptance everywhere. Banks and other providers will be free to use this public infrastructure and thus to scale up the payment services they offer at European level. This will make it easier for privatepayment solutions tobe rolled out throughout the euroarea. can be used for acceptance of digital euro online payments at points of sale.l By leveraging these open standards and working closelywith the respective standardisationbodies,the ECB minimises requiringtechnicalupgradestopaymentterminals. couldbereadyforfirst issuancein2029.Importantly,wewillnotneedtowaituntil thentosee the geographical reach. Merchants willikely start to adopt these standards immediately after adoption of the digital euro Regulation. This step will remove any remaining uncertainty in this area,which has beenunderdiscussionforalmostthreeyears.
#### Atokenisedeuroforwholesaletransactions
Letmenowturntowholesaletransactions.
- or, put simply, files - tokenisation makes it possible to transfer and update assets more efficiently thaniscurrentlythecase.Itallowstheentirelifecycleofanasset-fromtradingtosettlementto custody - to run on the same platform, available 24/7. And it supports automation through smart contracts. In a nutshell, tokenisation holds the promise of faster transactions with lower processing costs. However, this promise is predicated on the possibility of having on-chain settlement assets in tokenised form.lThese may be either private or central bank liabilities, as is already the case today. tokenised settlement asset widely used in crypto markets. More recently they have been put forward Their safety depends on the quality and liquidity of reserves, the robustness of redemption
arrangements, and effective regulatory oversight. If widely adopted, they may bring about profound financing the real economy.5 But stablecoins are only one of several possible tokenised settlement assets. Tokenised deposits, for they will manage to coexist.[l tokenised ecosystem grow and will support integration. With a larger market, demand for all forms of tokenised settlementassets,includingprivate ones,will increase.Theresult will besimilartothe current system where public and private settlement assets coexist. uodde palabis e bunsnd s wsson au sasse ep jo layeu ueadon tokenised asset transactions in central bank money. As part of our Pontes project, this service will be availableasofthethirdquarterofthisyear. published earlier this year. We aim to present a comprehensive blueprint in 2028.
Central SecuritiesDepositories Regulation to enable large-scale activities of central securities depositories using DLT. Looking ahead, it will also be important to consider whether fostering an integrated Europeanmarketfordigital assetswouldbenefit from a dedicated EU legal framework allowing tokenised assets to be issued, held and transferred seamlessly across the EU.]
### s
Finally, let me turn to cross-border payments.
financial institutions. They hamper international trade and financial integration and make remittances slow and costly.[1o] strong support to the G20 cross-border payments agenda.1 But these frictions could worsen if new technologies increase fragmentation. We therefore need to overcome this risk.
currencies,including theSwedishkronaand theDanishkrone.
But to take our response to cross-border inefficiencies even further, we are working on interlinking fast payment systems available in many other countries, including outside the European Union.12 countries' monetary sovereignty, as could happen with the spread of stablecoins denominated in a dominant currency. This approach builds on existing infrastructures rather than replacing them with entirelynewglobalsystems.Itpromotestrustandprotectsthemonetarysovereigntyofthe participating jurisdictions. Conclusion Letmeconclude. Across retail, wholesale and cross-border payments,our goal is to preserve trust and stability, as technologyreshapes howmoney is used. Theprivatesectorwill continuetodriveinnovation.Bymodernisingcentral bankmoneywhereneeded Thank you. 1. ECB (2026),The Eurosystem's comprehensive payments strategy, 31 March. 2. Cipollone, P. and Elderson, F. (2026),"Digital euro: an opportunity for banks", The ECB Blog, 27 March. 3. ECB (2026),"ECB signs agreements with European standard setters to facilitate digital euro payments",press release,24 April. 4. See Cipollone, P. (2026), "Sparking the transformation of finance: tokenisation and the role of central Century: an Agenda for Europe and the United States", hosted by the Harvard Law School and the 5. See Altavilla C.,Boucinha M.,Burlon L.,Adalid R.,Fortes R.and Maruhn F.(2026),"Stablecoins and Monetary Policy Transmission", Working Paper Series, No 3199, ECB, Frankfurt am Main, and Cipollone, P. (2026), "Digital assets,payment efficiency and monetary\_policy", speech at a workshop d'ltalia,the Euro Area Business Cycle Network and the Centre for Economic Policy Research, Rome, 4 May. 6. See Lagarde, C. (2026), "Stablecoins and the future of money: separating functions from instruments", speech by Christine Lagarde,President of the ECB, at the Banco de Espana LatAm Economic Forum in Roda de Bara, 8 May. 7. See Cipollone, P. (2026), "Building the rails for Europe's tokenised financial markets", keynote speech at an event on "Building Europe's integrated digital asset ecosystem: from vision to implementation" hostedbytheHouseoftheEuro,Brussels,23March. 8. ECB (2026), Appia = paving the way for a future-ready, integrated financial ecosystem leveraging. tokenisation and DLT. 9. See Cipollone, P. (2026), "Building the rails for Europe's tokenised financial markets", op. cit. 10. See Panetta, F. (2026), "Interconnect to stabilize: cross-border payments in a fragmenting world", Turning Point", London,5 May. 11. Seeparagraph16inG20(2020),G20RiyadhSummit Leaders'Declaration,22November;Financial StabilityBoard(2020),EnhancingCross-borderPayments-Stage1reporttotheG20,9April; CommitteeonPaymentsandMarketInfrastructures(2020),Enhancing\_cross-borderpayments: building\_blocks of a global roadmap-Stage2 report to the G20,Bank for International Settlements,13 July; and Financial Stability Board (2020),Enhancing\_Cross-border Payments -Stage 3 roadmap,13 October. 12.
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