The European Central Bank (ECB) has unveiled a “holistic payments strategy” aimed at future-proofing the Eurosystem amid rapid digitalization and advances in technologies such as distributed ledger technology and tokenization.
The plan sets out a dual-track approach, combining upgrades to existing payment infrastructure with support for new, market-driven alternatives.
It spans wholesale, business-to-business, retail, and cross-border payments, although cash remains outside its scope and will be addressed through a separate initiative.
At its core, the strategy is designed to safeguard the role of central bank money across both retail and wholesale markets, ensuring monetary policy effectiveness, financial stability, and the smooth functioning of payment systems.
Alongside this, the ECB is targeting greater resilience and autonomy in Europe’s payments landscape, while also encouraging more integrated, innovative, and competitive solutions for consumers and businesses.
A key focus is the role of tokenization. The ECB said its potential should be fully harnessed, particularly in wholesale markets, where central bank money will remain the anchor for settlement.
This would be complemented by private sector alternatives such as tokenized deposits and stablecoins, provided they are euro-denominated, governed within the EU, and subject to robust design and regulation.
The strategy also highlights the need for greater standardization, automation, and process integration in business-to-business payments, with the aim of delivering more efficient and innovative solutions for corporates.
Bringing together a range of existing initiatives, including the digital euro and projects such as Pontes and Appia, the framework is intended to ensure central bank money evolves in line with technological change, while supporting private sector innovation across both retail and wholesale payment markets.
Piero Cipollone, a member of the ECB’s executive board, said: “Payments are critical for society, and they are changing rapidly.”
“Whether it’s retail, wholesale or business-to-business payments, both domestic and cross-border, the ECB is working to ensure that they continue to be reliable, fast, competitive and open for innovation.”