Piero Cipollone, a member of the European Central Bank’s (ECB) Executive Board, urged Europe to embrace digital assets and distributed ledger technology (DLT) to create an integrated capital markets union.
Speaking at the Bundesbank Symposium on the Future of Payments on Oct. 7, Cipollone outlined how digital technologies can reshape Europe’s fragmented financial system, reducing intermediation costs and improving market efficiency.
Fragmentation
Cipollone pointed out that Europe’s 35 different listing exchanges and 41 trading platforms contribute to an inefficient and divided financial landscape. He added that regulatory barriers and inconsistent legislative frameworks hinder integration despite efforts like the TARGET2-Securities platform.
European markets are less competitive globally due to fragmentation, lacking harmonized rules on asset custody, tax processes, and regulatory supervision. Cipollone called for accelerated efforts to align regulations across EU member states.
According to Cippollone:
“The lack of a unified supervision or a permanent safe asset has left Europe’s capital markets fragmented.”
Cipollone emphasized the need for intensified integration efforts, especially with the growth of digital assets. Tokenization on DLT offers the potential to create a more efficient system bypassing traditional market inefficiencies.
Integrated market
Cipollone highlighted tokenization as a key driver of financial transformation, offering significant opportunities to improve liquidity and reduce transaction costs. Digital assets on DLT operate on a decentralized system, enabling real-time transactions.
Over 60% of EU banks are exploring DLT solutions, with 22% actively using them. Cipollone suggested the creation of a European ledger to support the transition to digital markets and ensure central bank money plays a key role in settlement.
Failure to coordinate DLT adoption could deepen fragmentation. Cipollone urged collaboration between regulators, central banks, and market participants to establish a unified digital capital market for Europe’s future.
Cipollone concluded:
“The transformative potential of tokenization goes beyond efficiency. By acting now, we can shape an integrated financial ecosystem that will serve Europe’s markets well into the digital future.”
**Meta Description:** Piero Cipollone, a member of the ECB, advocates for Europe to adopt digital assets and DLT for an integrated capital markets union. Learn about the benefits and challenges outlined in his speech.
**Focus Keyword H1:** Piero Cipollone and the European Central Bank’s Vision for Digital Assets
**H2s:** Fragmentation, Integrated Market
