ECB Accelerates Development of Digital Currency for Eurozone Financial System

13.03.2025

The European Central Bank (ECB) leadership is pushing for increased centralization and tighter regulation amid growing macroeconomic challenges. The ECB is expanding its work on a wholesale central bank digital currency (CBDC) payment system for inter-institutional transactions, according to a statement released on February 20. The system’s development will follow two phases:– the first phase will focus on creating a dedicated settlement platform for CBDC,– the second phase will involve deeper integration with existing ECB infrastructures, particularly foreign exchange markets. Piero Cipollone, ECB Executive Board member overseeing the wholesale CBDC initiative, stated that the project aims to support a more harmonized and integrated European financial ecosystem. Since 2020, the ECB has been exploring CBDC formats, including a retail digital euro for consumer use and wholesale cross-border settlement systems between central banks. Following Donald Trump’s ban on CBDC in the U.S., Cipollone reinforced his stance, emphasizing that the EU must develop a digital euro to compete with private stablecoins. He warned that the rise of private cryptocurrencies and stablecoins could lead to further disconnection between commercial banks and central banks, as people increasingly turn to digital alternatives.