SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Reserve Bank of India (RBI) | Ministry of Finance
On December 19, 2025, ECB Executive Board member Piero Cipollone delivered a keynote speech, ‘The Future of Money: A Central Bank Perspective’ at the Aspen Institute Italia. The speech emphasizes that while the core mandate of central banks—to issue money and protect its value—remains unchanged, the technological environment is undergoing a paradigm shift toward tokenisation and digital-first financial services.
Key strategic challenges and the ECB’s three-fold solution include:
Fragmentation in Retail Payments: Europe lacks a unified digital solution for everyday payments, leading to a heavy reliance on non-European providers. The digital euro is proposed as a digital equivalent of cash to provide pan-European rails for private innovation.
Capital Market Inefficiency: The rise of tokenisation and Distributed Ledger Technology (DLT) offers efficiency but risks fragmentation without a central bank money core. Starting in 2026, the ECB will enable the settlement of DLT-based transactions in central bank money.
Opaque Cross-Border Payments: Current systems are slow and costly. The ECB is working on interlinking fast payment systems, such as TIPS, with international counterparts to enhance cross-border efficiency and reduce reliance on stablecoins.
Public-Private Partnership: The strategy rests on the complementarity of public and private money, ensuring the “singleness of money” where one euro always equals one euro across all forms and platforms.
What is “Tokenisation” in the context of modern financial services? Tokenisation is the process of converting or issuing physical or financial assets as programmable digital tokens on a distributed ledger. These tokens carry both information about the asset (ownership, issuer) and the “smart contract” rules governing its use. By enabling automated and synchronized transactions, tokenisation promises more efficient and transparent capital markets, provided they are anchored by stable central bank money to eliminate credit risk.
Policy Relevance
The ECB’s proactive stance on digital currency and DLT settlement is highly relevant for India’s ongoing Central Bank Digital Currency (CBDC) pilots and the development of the Unified Payments Interface (UPI). As India seeks to internationalize the Rupee and enhance cross-border payment links with the Eurozone, the ECB’s “digital euro” framework serves as a critical regulatory and technological benchmark. Understanding these shifts is essential for the Ministry of Finance to safeguard India’s monetary sovereignty and strategic autonomy in the evolving global digital financial architecture.
Relevant Question for Policy Stakeholders: As both the ECB and RBI move toward full-scale Retail CBDC issuance, how will these central banks collaborate on "Cross-Border Interoperability" to ensure that the "singleness of digital money" can be maintained during international trade and remittances?
Follow the full news here: The Future of Money: A Central Bank Perspective