Piero Cipollone, a member of the European Central Bank's Executive Board, has made a strong case for the introduction of tokenized central bank money to support the scaling of Europe's tokenized financial markets. He argues that relying solely on stablecoins or tokenized deposits—both forms of private digital money—is insufficient to serve as a reliable public settlement anchor.
Shortcomings of Stablecoins and Tokenized Deposits
Cipollone highlighted that stablecoins, despite their pegs, still carry price volatility and credit risk. Tokenized deposits, issued by commercial banks, also expose counterparty risk and lack the ultimate guarantee of central bank money. To build a robust and decentralized digital financial system, he contends, assets with finality backed by the central bank must underpin settlement.
Public-Private Collaboration and Regulatory Framework
The ECB official also called for enhanced public-private collaboration and a more robust legal framework. He criticized some current initiatives for building advanced settlement infrastructure on “fragmented regulatory foundations,” which could create systemic vulnerabilities. Cipollone urged a cohesive approach to regulation and infrastructure development to prevent regulatory arbitrage and provide a predictable environment for innovation.
His remarks align with the ECB's ongoing efforts in the digital euro and tokenized securities space. The central bank has already launched the second phase of the digital euro project and participated in several tokenized bond settlement experiments. However, industry players remain divided on the pace of CBDC adoption, with some banks concerned about disintermediation.
Market Implications
This call comes amid a global boom in tokenized assets. According to data referenced in the context, tokenized U.S. Treasuries have surged to $24.216 billion, and Europe is racing to catch up through regulatory innovation. If Cipollone's vision gains traction, the ECB may accelerate the issuance of wholesale tokenized central bank money, potentially reshaping the current stablecoin-dominated on-chain settlement landscape.
Market reactions are already visible: the CBDC token showed a +0.59% change and the STABLE token +10.27%, reflecting sensitivity to policy signals. Cipollone's advocacy underscores the need to balance public sector credit with private innovation, using tokenized central bank money as the anchor for next-generation financial infrastructure.