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Piero Cipollone on Economic Policy

Digital finance advocate (strong)

TL;DR

Piero Cipollone advocates for proactive central bank leadership in digital finance to secure the euro's monetary sovereignty and foster innovation.

Key Points

  • He advocates for the issuance of the digital euro as a complement to cash to ensure central bank money remains a viable retail means of payment in the digital age, with issuance potentially beginning in 2029.

  • He supports a dual-track approach for wholesale payments: Project Pontes to bridge existing TARGET services with DLT for near-term settlement, and Project Appia for a long-term integrated digital asset ecosystem.

  • He stresses that policy must consider the medium to long-term effects of monetary restriction, arguing against remaining excessively restrictive to avoid permanent scars on the euro area's economic potential, such as weak capital accumulation.

Summary

Piero Cipollone, as a Member of the Executive Board of the European Central Bank, positions economic policy primarily through the lens of navigating digital disruption in payments and finance to secure the euro area’s monetary sovereignty and competitiveness. He contends that the central bank must take a leading role in shaping this transformation, not merely follow it, to prevent the marginalization of central bank money and avoid excessive dependencies on non-European solutions in retail and wholesale transactions. His core economic stance emphasizes a public-private partnership where the Eurosystem provides a safe, common foundation through digital central bank money, like the digital euro and tokenized settlement assets, upon which the private sector can safely innovate and scale up pan-European services.

This forward-looking approach is intended to address current fragmentation in retail payments, where reliance on a few foreign providers risks strategic autonomy, and future risks in digital finance where non-euro tokenization could undermine the euro's role. He sees economic efficiency not just in short-term cost reduction but in long-term resilience and growth, arguing that addressing these dependencies through digital means—such as launching the digital euro and Projects Pontes and Appia for wholesale settlement—will consolidate economic resilience, support growth, and ultimately reinforce the euro's international role in a fragmenting world.

Key Quotes

Monetary policy should take the medium and long-term effects of an excessively restrictive stance into account.

The digital euro is a strategic project that is deeply rooted in the digital transformation of our economy.

Frequently Asked Questions

Piero Cipollone's core focus within economic policy is leveraging technology to modernize money and payments within the Eurosystem. He strongly emphasizes the need to proactively develop digital central bank money, such as the digital euro, to maintain the euro's relevance and the stability of the financial system.

He views increasing global economic fragmentation, driven by geopolitical tensions and trade barriers, as a significant risk to growth and stability. Piero Cipollone argues that the euro area must address its dependencies in digital payments and finance to bolster its monetary sovereignty against external pressures.

He sees private money like stablecoins as a potential threat to monetary sovereignty if they dominate, especially if they are dollar-denominated. Piero Cipollone believes that public central bank money must complement private innovation, providing a risk-free anchor that ensures private assets can be converted at par.

Sources10

* This is not an exhaustive list of sources.