A senior European Central Bank policymaker stated on Wednesday that the design of the digital euro will ensure the protection of European domestic payment card schemes and maintain banks at the core of the eurozone's payment system.

The digital euro, to be managed directly by the ECB with users holding accounts at the central bank, had raised concerns among financial institutions about a potential diminishment of their role in payment processing.

The digitization of payments has already weakened the status of cash—presently the only form of central bank money in existence—prompting the ECB to move forward with a central bank digital currency to compete with private forms of money.

ECB Executive Board member Piero Cipollone noted that ongoing transformation in the payments industry means banks would face this risk even without the digital euro, and that the digital euro would in fact support them.

Addressing the steering committee of the Italian Banking Association (ABI), Cipollone said the digital euro is intended to "preserve the central role of banks in payments."

He stated, "Banks could lose their role in payments not only because of stablecoins but also due to other private payment solutions."

Banks stand to lose not only revenue but, more importantly, access to customer payment data, which is essential for offering other high-margin services to their clients.

**Higher Fees?**

Cipollone also indicated that the ECB aims to protect European domestic payment systems, such as Italy's Bancomat card scheme and Spain's peer-to-peer payment system Bizum.

He added that, to strengthen the role of these local systems, the digital euro system is designed to make it cheaper for merchants to use these networks.

"The fee cap charged to merchants by the digital euro network will be lower than the typically high fees of international payment networks, but higher than the lowest-cost domestic payment systems," Cipollone said.

Only 8 out of the 21 eurozone member countries have national-level payment systems, with the remainder relying entirely on international networks.

He further commented, "The digital euro will be a concrete benefit for domestic payment systems."

Strained transatlantic relations have led the ECB to view the fact that "over three-quarters of European transactions are processed through international payment networks like Visa and Mastercard" as a strategic risk.

Legislative proposals required for the ECB to launch a digital currency have been stalled for two years, though the European Parliament gave its first significant backing to the digital euro this month.

In December of last year, the EU Council expressed similar support, describing the project as crucial for European economic security and stating that the digital euro would be "accessible to the public and businesses, usable for payments anywhere in the eurozone at any time."