The role of central bank money in safeguarding national sovereignty

Piero Cipollone, Member of the Executive Board of the European Central Bank (ECB), delivered a speech at the conference “80 years of the Italian Republic” hosted by Sapienza University, Rome.

He highlighted the historical significance of Italy’s recovery of sovereignty after World War II and the constitutional principles that enshrine sovereignty as belonging to the people, exercised within legal limits. Cipollone emphasized the importance of European integration in protecting national sovereignty.

Focusing on monetary sovereignty, he explained that control over central bank money is essential for economic independence. The euro plays a key role in maintaining this sovereignty, with its international importance and domestic trust levels, currently at 82%.

Cipollone addressed external dependencies in digital retail payments, noting the reliance on non-European solutions and the need for a European digital payment infrastructure. He discussed plans for a digital euro, including legislative approval, pilot issuance in 2027, and first issuance in 2029, to ensure a European-controlled digital payment option.

The speech also covered developments in wholesale markets, tokenisation, and distributed ledger technology (DLT), emphasizing the importance of settlement in central bank money to support a digital finance ecosystem and protect monetary sovereignty.

He highlighted efforts to strengthen the euro’s international role through links with global instant payment systems and the potential for digital euro to facilitate cross-border transactions, reducing reliance on third currencies.

In conclusion, Cipollone reflected on the euro’s role in safeguarding sovereignty, emphasizing the need to address external dependencies and reinforce resilience, efficiency, and security of monetary systems to uphold the sovereignty entrusted by the Italian people 80 years ago.