The EU’s proposed digital euro could face disruption if run on current payment rails, a member of the European Central Bank (ECB) has told lawmakers.
Speaking on September 4, ECB Executive Board member Piero Cipollone stressed the importance of providing a resilient and inclusive digital euro.
In doing so, he admitted the EU’s current digital payment systems “could be constrained” in its ability to act swiftly from potential cyberattacks and power outages, highlighting the power outages that occurred in Spain and Portugal this year.
Digital payments bring many advantages such as speed, convenience and efficiency. But they crucially depend on the strength of our digital infrastructure,” said Cipollone
“And when critical services are interrupted, citizens expect public authorities to ensure continuity. So what would happen if we weren’t in a position to ensure payments continuity? We would be blamed for not having acted when we could.”
Cipollone has spoken to EU lawmakers on five different occasions regarding the development of Europe’s central bank digital currency (CBDC).
Facing off disruption
In outlining how Europe can defend against potential disruptions, Cipollone set out three resilience pillars for the digital euro.
First is the technical backbone where transactions would be processed through multiple servers, ensuring payments can be rerouted in the event of a cyberattack or regional outage.
Second is the dedicated digital euro app, designed for all EU citizens. Beyond providing access across multiple payment providers, the app would serve as a fallback if a cyberattack disables a bank, provided core services remain intact.
Third is offline functionality, which would allow payments to be made without an internet connection, ensuring continuity during power cuts or connectivity failures.
“The digital euro would in fact support business continuity in times of crisis by providing additional payment rails on top of the existing private solutions,” Cipollone said.
“In other words, by having alternative payment options in place, we would enhance resilience by ensuring that there is always spare capacity in the system.”
Inclusiveness
As the digital euro will act as a digital representation of the euro, Cipollone reassured lawmakers that a CBDC would “guarantee access for all citizens – no matter where they live, how much they earn or how digitally skilled they are”.
Cipollone said the first step to boost inclusiveness of the digital euro is its technological design, built to meet everyday consumer needs such as transaction speed and ease of use.
The ECB is running user research and focus groups with vulnerable and digitally excluded groups to identify and remove barriers. He added that the ECB is also designing user interfaces that give people a smoother experience, including those with disabilities, limited internet access, or low levels of digital literacy.
The second pillar of inclusiveness is nationwide support. Cipollone explained that the ECB is working with local authorities, libraries, and post offices so consumers can receive free assistance and direct access to digital euro services.
He argued these touchpoints will play a vital role in helping people adopt the new currency with confidence.
