ECB targets 2029 for a first issuance of the digital euro

The Council set its position in December 2025 and Parliament in July 2026; trilogues are under way and the European Council wants to conclude them by the end of 2026. A 12-month pilot will start in the second half of 2027 with 36 payment service providers chosen from more than 50 candidates. A new workstream will study payments initiated by AI agents and micropayments.

On the wholesale side, Pontes has already settled €1 billion in ESM bonds issued using DLT and will be available 24/7 in 2028. Cipollone says stablecoins and tokenized deposits “can play useful roles”, but that central bank money guarantees “that a euro remains a euro”.

Piero Cipollone, Tirana, 5 November 2026 .- Opening speech by Piero Cipollone, Member of the Executive Board of the ECB, at the eighth International Conference on Regional Card Schemes and Retail Financial Market Infrastructures.

Money connects people and societies.

But to do so, it must be trustworthy. It must allow people and businesses to transact safely and efficiently. And it must evolve in step 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.

More and more people are paying digitally. Tokenization could reshape the financial value chain. New solutions are being considered to improve cross-border payments. In addition, geopolitical fragmentation is making the resilience and governance of critical infrastructure increasingly 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 reliable public foundation for payments and finance, on which private innovation can flourish. And it means preventing digitalization from increasing fragmentation or creating new dependencies.

That 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 modernize the monetary and payment system in Europe.

The Western Balkans are also taking active policy steps to improve and integrate payments in the region. Several countries, including Albania, have already joined the Single Euro Payments Area (SEPA). In addition, a system similar to the Eurosystem’s TARGET Instant Payment Settlement (TIPS), developed by the Bank of Italy, is already fully operational in Bosnia and Herzegovina and Montenegro, and will soon be rolled out in Albania, Kosovo and North Macedonia. This system enables real-time, low-cost domestic transactions in local currency, 24 hours a day, 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.

Today I will talk to you about four key initiatives we are working on.

We are modernizing euro banknotes.

We are developing a digital euro.

We are making it possible to settle transactions in tokenized assets in central bank money and creating the conditions for an integrated and innovative tokenized finance ecosystem.

In addition, we are interlinking fast payment systems to make cross-border payments faster and more efficient.

These initiatives share a common goal: ensuring access to safe public money, while creating room for private innovation and international cooperation.

Modernizing euro banknotes

Let me start with the most familiar form of central bank money: cash.

In debates on digitalization, cash is sometimes spoken of as a technology of the past. This is a mistake. At a time when cyber risks, hybrid threats and system outages dominate the headlines, cash remains the most resilient form of payment we have.

There are more than 31 billion euro banknotes in circulation, worth over €1.6 trillion. People see cash not only as a means of payment, but also as a store of value and a safeguard in times of uncertainty. It is also one of the most tangible symbols of European unity.

Moreover, cash is inclusive and easy to use, as it requires neither a device nor an intermediary. It protects privacy. And, most importantly, it provides freedom of choice.

That is why Europe does not have to choose 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 the digital euro, it includes a proposed Regulation on the legal tender of euro banknotes and coins. The European Parliament and the Council of the European Union have adopted their respective positions and interinstitutional negotiations are under way.

But protecting cash is not enough. We must also make it fit for the future.

The next generation of euro banknotes will feature enhanced security features, have a smaller environmental footprint and be more accessible. We also want Europeans to feel that their banknotes reflect their shared cultural identity and natural environment.

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 still care deeply about their banknotes.

The ECB’s Governing Council expects to decide on the final design at the end of this year. The future euro banknotes will gradually enter circulation from the early 2030s, while current banknotes will remain valid.

The future of public money will therefore remain physical.

But it must also be digital.

Preparing a future-proof digital euro.

Currently, central bank money is only available to the public as cash. However, physical cash cannot be used online or for the growing range of digital transactions.

Nor does Europe have a digital solution that can be used for everyday payments across the euro area. Digital payments remain fragmented along national borders and use cases. There is also a strategic dependency: 13 euro area countries rely entirely on non-European companies for card payments in shops.

The digital euro would remedy this situation.

It would be a digital form of money 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. Its basic use would be free of charge for consumers. We are also 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 details of the transaction would be known only to the payer and the payee. For online transactions, the Eurosystem would not know the identity of the people involved in the payment.

The digital euro would therefore preserve people’s freedom to pay with central bank money as the economy becomes digital.

But it would do more than offer another payment option.

It would create a common public infrastructure and acceptance layer for European payments. Payment service providers could leverage that infrastructure and use the digital euro’s open standards to offer services across the euro area.

The digital euro would help European private payment solutions expand beyond their current geographical and functional limits. It would reduce investment costs and allow providers to focus their investment on customer-facing innovation.

Beyond the euro area, the digital euro’s standards and rulebook could serve as a useful model for countries considering developing a national digital payment system. This would facilitate interoperability with the digital euro in the future.

The aim of the digital euro is not to replace 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 be responsible for distributing the digital euro and providing customer services. The Eurosystem would not charge fees for the use of the system or for payment processing. 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 and not as a form of investment. It would not be remunerated and individual holdings would be limited. However, this would not restrict transactions: a waterfall mechanism 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 moving forward. The EU Council agreed its position in December 2025, the European Parliament adopted its own in July 2026 and trilogue negotiations are now under way. The European Council has called for negotiations to be concluded by the end of this year. If the legislative process is completed by the end of 2026, our aim is to be ready for a possible first issuance in 2029.

But technical preparations must move forward in parallel.

The digital euro pilot programme is scheduled to start in the second half of 2027 and last 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 advanced.

The aim is not simply to test the technology. A payment system is an ecosystem comprising service providers, merchants, central banks, infrastructure operators and users. The pilot will allow 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 programme. The selected merchants will test customer payment processes, assess integration with existing payment systems and provide feedback on the user experience.^[5]

The digital euro is not simply a fix for current shortcomings in the euro area payments landscape. It is a solution for the future. It will provide a platform to innovate and improve the quality and variety of payment services. New opportunities are emerging. We want to make sure European payment service providers are best placed to seize them and gain a strong competitive edge.

In this context, we recently launched a new wave of activities through the digital euro innovation platform, following on from a first wave involving around 70 market participants.^[6]

One workstream will experiment with integrated e-receipts, payments involving multiple payers or payees, conditional payments and new features offered through payment apps.

A second workstream will look ahead, exploring developments that could enhance the digital euro in future releases. This includes potential applications of artificial intelligence, such as payments by AI agents or micropayments, and possible uses of the digital euro in interactions with public services, for example when paying for transport, mobility and parking services.

We cannot know exactly how Europeans will want to pay in 20 years’ time. But we can lay the foundations for an economy that is open to innovation, robust enough to earn public trust and able to evolve in step with users’ needs.

Pontes and Appia: supporting tokenized finance

Our third initiative concerns digital finance.

By allowing assets to be represented as digital records, tokenization could change the way they are issued, traded, settled, held and managed.

Today, these activities usually take place on separate infrastructures and ledgers. Tokenization could integrate them into a shared digital environment, allowing smart contracts to automate processes and generating efficiency gains that could reduce costs and make it easier for small businesses to access financing.

However, market participants have made clear that tokenized finance needs a safe settlement asset. Private instruments, such as stablecoins and tokenized bank deposits, can be useful. But central bank money provides risk-free final settlement and a common reference into which private forms of money can be converted at par. It ensures that a euro remains a euro, regardless of 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, allowing wholesale transactions in tokenized assets to be settled in central bank money.

It builds on exploratory work carried out by the Eurosystem 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 already operational 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 supranational institutions, including the World Bank, are preparing to issue on DLT and possibly settle on Pontes. Pontes’ current services will be gradually expanded with enhanced features, such as immediate settlement on the Eurosystem’s DLT platform and longer operating hours, as we move towards 24/7/365 availability in 2028.

Pontes provides a reliable settlement foundation for tokenized securities and helps connect private tokenized settlement assets with central bank money.

Appia: designing an integrated ecosystem

With tokenization, we have the opportunity to create an integrated market for digital assets from the outset, which would help address the fragmentation of European capital markets. However, 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. In addition, 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 tokenized financial ecosystem. It combines analysis, experimentation and public-private cooperation with the aim of presenting a strategic 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 submitted at least one proposal to contribute.^[9]

Pontes and Appia are therefore two parts of the same strategy.

Pontes provides a bridge that allows DLT-based transactions to be settled in central bank money, while Appia is designing the digital finance ecosystem of the future.

Interlinked fast payment systems

Our fourth initiative concerns cross-border payments.

Domestic payments have become considerably faster. However, international payments are often slow, expensive and opaque. High costs reduce the value of remittances. And long payment chains complicate trade, especially for small businesses.

Our approach is to connect the fast payment systems that central banks and the private sector have already developed. This will help reduce the cost of payments and speed them up.

TIPS, the Eurosystem’s instant payment settlement service, processes payments in central bank money around the clock. It currently supports the euro, the Swedish krona and the Danish krone, and the Norwegian krone and Icelandic króna are expected to join in the coming years. Its cross-currency transaction 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 instant payment settlement that uses TIPS technology. The number of transactions is growing every day: on Monday, there were already close to 30,000 transactions per day. Albania, Kosovo and North Macedonia are expected to join soon, bringing all the countries participating in the initiative onto the platform. This will help modernize payments in the region and boost its integration.

We are currently working to connect TIPS with payment systems worldwide.

Interlinking enables communication between fast payment systems. People can continue to use their usual banks and payment methods, while transfers reach payees connected to the system of another jurisdiction.

This can shorten payment chains and reduce costs. It also respects monetary sovereignty, as participating jurisdictions retain control of their national currencies and infrastructures.

Interlinking therefore offers a practical model of international cooperation: strengthening ties without giving up sovereignty.

Progress is being made on establishing a bilateral link with India’s Unified Payments Interface (UPI), the world’s largest fast payment system by transaction volume. We are also analysing a possible connection with Nexus Global Payments, which will connect fast payment systems in Southeast Asia, and exploring links with the instant payment systems of Switzerland and Brazil. Last week, EU and Canadian leaders also indicated that they would support efforts to connect instant payment systems in order to facilitate faster, cheaper and smoother transactions between the two economies.^[10]

As for the Western Balkans, at least two paths can be envisaged: the first and most direct is full integration into the EU. In that case, the reference model would be Sweden and Denmark until the eventual adoption of the euro. The alternative would be to explore a possible interlink with TIPS, once a feasibility analysis justifies the investment. In any case, the TIPS system, by its very nature, should already facilitate integration, since payment service providers operating in both the euro area and the Western Balkans will use two technically very similar platforms. This would make it easier for them to provide traditional correspondent banking services.

Conclusion

Let me conclude.

The four initiatives I have presented today represent different dimensions of the same transformation. We are ensuring that central bank money remains fit for purpose as preferences, technologies and the geopolitical landscape evolve.

Modernizing 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 could use as a platform for innovation.

Pontes and Appia ensure that central bank money remains the settlement anchor as financial markets embrace tokenization.

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 national and international infrastructures. It will be shaped by the choices we make on trust, transparency, 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, reliable and resilient monetary system.

We cannot simply watch the transformation of money from the sidelines. We have a duty to shape it in the public interest.