- Christine Lagarde said the ECB is preparing a digital euro for day-to-day payments.
- Lagarde said September euro-area inflation was 3.8% and largely reflected high energy costs.
- The ECB’s Pontes system began with core services and full implementation is expected by 2028.
European Central Bank President Christine Lagarde said the euro-area economy remains resilient while the ECB continues work on the digital euro. Speaking at the IMF Annual Meetings on Saturday, Lagarde said September inflation in the euro area reached 3.8%, with high energy costs accounting for much of the increase. She added that an energy shock is expected to keep inflation above the ECB target through the first half of 2027, though a measured policy response remains appropriate. Alongside that outlook, Lagarde said the digital euro is being prepared as a digital equivalent of cash for day-to-day payments, with the ECB presenting it as part of its broader payments strategy.
Lagarde outlines digital euro payments role
Lagarde said the ECB is preparing to complement cash in the retail space with its digital equivalent, the digital euro. She described the project as intended for day-to-day payments, placing it within the ECB’s plans for retail payment infrastructure rather than framing it as a replacement for cash.
According to Lagarde, the digital euro would support innovation and competition in retail payments. She also said its role would be to help ensure the continued co-existence of public and private solutions, which she linked to Europe’s strategic autonomy in payments.
Inflation outlook and euro-area conditions
Lagarde said September’s 3.8% inflation reading for the euro area was largely the result of high energy costs. She added that the ECB expects those energy-related pressures to ease next year, giving more context to the latest inflation data.
At the same time, she said an energy shock is likely to keep euro-area inflation above the central bank’s target through the first half of 2027. Even with that outlook, Lagarde said a measured policy response remains appropriate, according to the statement delivered at the IMF Annual Meetings on Saturday.
ECB systems linked to digital euro direction
The ECB has also been advancing related payments and settlement infrastructure. Cointelegraph reported on Sept. 21 that the central bank launched Pontes, a system that allows financial institutions to settle wholesale tokenized asset transactions in central bank money.
That system was presented as an alternative to private settlement assets such as stablecoins. Pontes initially offers a core set of services, and its full implementation is expected by 2028, showing that ECB work around the digital euro is unfolding alongside other settlement initiatives.
Conclusion
Lagarde’s latest remarks combined two ECB messages: that the euro-area economy remains resilient and that the digital euro is moving closer as a payments project. She tied the digital euro to day-to-day retail use, saying it would complement cash while encouraging innovation and competition in payments. Her comments also came with an updated inflation view, with September inflation at 3.8% and energy costs identified as a key factor. Alongside this, the ECB’s earlier launch of Pontes for wholesale tokenized asset settlement in central bank money shows the institution is building out multiple payment-related systems, with full implementation of that platform expected by 2028.
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