Cipollone: Digital euro's bank impact minimal, costs 3.4% of IT budget

Every time a central bank digital currency enters the conversation, bankers collectively clench. Piero Cipollone, a member of the European Central Bank's Executive Board, wants them to relax.

Cipollone has been making the case that the digital euro will have minimal effects on banks, positioning the project not as a disruption to the existing financial system but as a shield against outside competition. The real threat to European banks, he argues, isn't the ECB's digital currency. It is non-European card networks and the rising tide of stablecoins eating into their payments business.

Cipollone and Supervisory Board Vice-Chair Frank Elderson co-authored a blog post on March 27, 2026, laying out the specifics.

The estimated cost for banks to invest in the digital euro infrastructure sits between €4 billion and €5.8 billion over four years. That represents roughly 3.4% of the annual IT budgets of significant European banks.

The ECB has also baked in several design features specifically to keep banks comfortable. The digital euro will not pay interest to holders, a feature technically described as "non-remuneration." Individual holding limits will cap how much digital euro any single person can hold. And a "reverse waterfall" automatically converts excess digital euro holdings back into bank deposits.

Cipollone and Elderson were explicit that these features, taken together, safeguard bank liquidity and financial stability.

As of February 2026, Cipollone stated that the digital euro's goal is to maintain the centrality of banks in payments. Banks would distribute the digital euro, manage wallets, and handle transactions. The ECB provides the rails. Banks keep the passengers.

This infrastructure would also enable new capabilities like conditional payments, where transactions execute automatically when predefined conditions are met – for example, insurance payouts triggered by a verified event, or supply chain payments released upon delivery confirmation.

As of mid-May 2026, the ECB had attracted over 50 expressions of interest from payment service providers looking to participate in the digital euro pilot.

The project is currently in a preparation phase, with a potential pilot targeted for 2027. Actual issuance is eyed for 2029, contingent on regulatory approval by the end of 2026.

The 3.4% IT budget figure suggests the direct financial burden on banks is manageable, Cipollone and Elderson wrote. The holding limits and reverse waterfall mechanism should limit deposit flight risk by structurally preventing retail customers from draining savings accounts into government-backed digital wallets.

If the digital euro succeeds in creating a pan-European payments infrastructure, it could reduce European banks' dependency on Visa and Mastercard rails and give them a native tool to compete with stablecoin-based payment systems.

Mastercard carries an AlphaScala score of 65 out of 100, reflecting moderate conviction on its exposure to payments disruption – a category where the digital euro directly applies.