Digital Euro Essential for Payment Continuity During Crises, ECB Argues

European Central Bank board member Piero Cipollone positioned a digital euro as critical infrastructure for financial resilience during systemic disruptions. Speaking at the European Parliament, he outlined scenarios where a central bank digital currency could maintain payment functionality when private sector systems fail.

The proposal addresses two failure modes: cyberattacks disabling bank apps but leaving backend systems operational, and widespread power outages disrupting electronic payments. "Cash remains our only true fallback," Cipollone acknowledged, "but as society increasingly moves away from physical money, we must complement it with a digital alternative."

The ECB's digital currency initiative mirrors global central bank efforts to counter private payment innovations, including stablecoins and tech giant payment platforms. Offline functionality emerges as a key differentiator for the proposed CBDC, potentially offering reliability advantages over existing digital payment rails.