Europe and monetary sovereignty

Piero Cipollone, Member of the Executive Board of the ECB, delivered a speech at the Accademia Nazionale dei Lincei on the significance of maintaining monetary sovereignty within the euro area.

He emphasized that preserving monetary sovereignty has been a key objective of the euro, which contributes to Europe’s independence. Cipollone highlighted the need to address dependencies in payments and finance caused by geopolitical and technological developments, especially in digital retail payments and digital finance.

He explained that the euro strengthens Europe’s sovereignty by providing a shared monetary policy, reducing exchange rate volatility, and enhancing international role and resilience. The euro’s international presence supports monetary policy transmission and financial stability.

The speech identified current dependencies, such as reliance on foreign payment schemes and stablecoins, which threaten monetary sovereignty. The ECB is preparing to issue a digital euro to ensure a European public option for digital payments, supporting domestic and cross-border transactions, and reducing reliance on international solutions.

In digital finance, the ECB plans to introduce tokenised central bank money for settlement on distributed ledger technology (DLT), safeguarding Europe’s monetary sovereignty and fostering a pan-European digital finance ecosystem through projects like “Pontes” and “Appia”.

Cipollone also addressed the euro’s international role, noting efforts to expand links between fast payment systems globally, and the importance of strengthening Europe’s role in cross-border payments to reduce reliance on the US dollar and stablecoins.

He discussed the need to improve access to domestic funding for innovative European firms, which currently rely heavily on US venture capital, and the importance of a unified European market for digital payments and finance to enhance competitiveness and productivity.

Finally, Cipollone concluded that safeguarding monetary sovereignty through bold actions in payments, finance, and innovation will reinforce Europe’s resilience, efficiency, and security, supporting the euro’s role and Europe’s independence in an uncertain global environment.