Latest news with #PieroCipollone
Free Malaysia Today
03-07-2025
- Business
- Free Malaysia Today
Euro zone bonds steady ahead of ECB speakers, shrug off Trump's bill
European Central Bank president Christine Lagarde said the euro zone is facing increased volatility in inflation. (Reuters pic) LONDON : Euro zone government bond yields were steady in early trading in Europe today, taking their lead from Treasuries, which barely reacted to the passing of US President Donald Trump's landmark tax and spending bill. Two European Central Bank (ECB) policymakers warned yyyesterday about the hit from a further appreciation of the euro on a weak euro zone economy that is bracing for US tariffs. The 90-day pause Trump activated following the market chaos unleashed by his April 2 'Liberation Day' tariff announcement expires in a week. ECB president Christine Lagarde said this week the euro zone is facing increased volatility in inflation, which will mean the central bank will have to act more forcefully to keep price pressures around its 2% target. German two-year yields, which tend to be the most sensitive to changes in rate expectations, were up less than 1 basis point today at 1.852%. Benchmark 10-year Bund yields rose 1 bp to 2.577%, in line with 10-year Treasuries, which held at 4.255%, near their lowest since early May. Money markets show traders expect just one more rate cut this year from the ECB, which would bring the benchmark deposit rate to around 1.8%, from 2% right now. Lagarde speaks later today, delivering the closing remarks at the ECB's Forum on Central Banking in Portugal. ECB board members Luis de Guindos, Piero Cipollone and Philip Lane will also speak during the day. Italian 10-year yields rose 2 bps to 3.489%, bringing their premium over Bunds to 90.5 bps, according to LSEG data. The spread is close to its lowest in a decade.
Arabian Post
02-07-2025
- Business
- Arabian Post
ECB Embarks on Dual‑Track DLT Settlement Strategy
The European Central Bank has green‑lit a pioneering dual‑track framework to enable settlement of transactions on distributed ledger technology platforms using central bank money. The Governing Council's initiative combines a short‑term pilot, dubbed Pontes, scheduled to interface DLT platforms with TARGET Services by the end of the third quarter of 2026, and a longer‑term initiative, Appia, which seeks to establish a future‑proof global DLT infrastructure. Pontes represents the near‑term goal: creating a secure link between existing DLT platforms and the Eurosystem's TARGET services—namely TARGET2, T2S and TIPS—through a unified Eurosystem solution. It builds directly on exploratory work carried out between May and November 2024, where 64 participants explored over 50 experimental setups that used intraday escrow and liquidity tokens. The ECB has indicated its intention to invite expressions of interest from the market to join Pontes' pilot phase, expected to commence by Q3 2026. The longer‑term Appia track explores integration of DLT in a broader ecosystem, extending into global payment and securities infrastructures. This initiative aims to support international use cases such as cross‑border foreign exchange settlements and compliance with global standards, collaborating with public and private sector stakeholders to assess interoperability, scalability and legal frameworks. ADVERTISEMENT During the 2024 discovery phase, experiments featured diverse approaches, including trials led by the Banque de France and Banca d'Italia. These trials used escrow-based intraday liquidity provision mechanisms that participants later advocated to evolve into overnight capabilities, shedding light on liquidity management inefficiencies. Officials noted the potential for simultaneous settlement and collateral automation to cut credit and liquidity risks, while potentially reducing operational costs. Piero Cipollone, a member of the ECB's Executive Board, remarked that although DLT and tokenisation remain nascent, they 'are likely to offer new ways of improving the settlement of financial transactions.' He emphasised that the dual‑track approach serves innovation while maintaining security and efficiency in financial market infrastructure. Pontes and Appia will operate under dedicated market contact groups. The ECB intends to outfit each with analysts and market participants to ensure operational robustness and collect stakeholder feedback as integration proceeds. With Pontes launching a Q3 2026 pilot, the ECB is concurrently reviewing additional trial proposals for integration within existing TARGET services frameworks. The initiatives support the Eurosystem's wider ambition to modernise wholesale settlement systems. Appia is envisioned as an evolution towards integrated ecosystems that support global operations and stimulate interoperability with other jurisdictions, thereby elevating Europe's position in the digital infrastructure space. European authorities have signalled enduring commitment to innovation since experimental work in 2024. The report released today, aligned with Pontes and Appia's dual‑track launch, highlights how central banks across the continent are balancing emerging technologies with systemic resilience goals—managing legal, technical and liquidity implications harmoniously. Market analysts believe the Pontes initiative addresses immediate demand from DLT innovators for central bank money settlement in familiar frameworks, while Appia opens the door to more ambitious, globally interoperable DLT ecosystems. Senior banking figures in Frankfurt have described the move as a 'critical turning point' in central banks embracing digital transformation to reduce transaction costs and boost cross-border efficiency across Europe. The ECB's decision signals readiness to bridge traditional financial infrastructure with blockchain-based innovations without compromising safety or oversight. Through Pontes, the Eurosystem seeks to preserve market standards for liquidity and settlement, building confidence among banks and fintechs in central bank money λ integration. Appia, in turn, presents a vision of digital finance aligned with evolving global regulation and technological standards. This marks the first time the ECB has approved a formal pilot to connect central bank money with DLT platforms. The outcomes of Pontes will help shape future integrations—potentially serving as a template for central bank digital currencies and wholesale tokenised ecosystems. The experiments under Appia could establish key precedents for global interoperability standards and regulatory coordination, reinforcing the Eurosystem's role as a leader in secure, innovative payment infrastructures.
Forbes
13-06-2025
- Business
- Forbes
Quantum-Safe Payments: Hype, Hope Or Just Headline Insurance?
Quantum investment is growing - when will it impact payments? (Photo by Thomas Niedermueller/Getty ... More Images) When a Europol-backed working group warned in February that banks should 'start their post-quantum migrations now,' it triggered a familiar ripple through boardrooms: Is Q-Day finally close enough to budget for? The Quantum Safe Financial Forum, whose members include the Fed, the ECB, and half a dozen global systemically important banks, framed the threat in stark terms: criminals are already stockpiling today's encrypted payment traffic, betting they can decrypt it tomorrow. Card networks, instant-payment switches, and mobile wallets rely on public-key cryptography: the RSA and elliptic-curve algorithms that every ISO 8583 or ISO 20022 message depends on. A fault-tolerant quantum computer could, in theory, break those keys in hours. Visa's global head of fraud services told PYMNTS that threat actors are 'steal-now-decrypt-later' harvesting card data already, waiting for quantum horsepower to catch up. Central bankers are equally blunt. In a speech titled Technology as a New Frontier for Macro-Prudential Policy, ECB board member Piero Cipollone called quantum risk 'a serious threat to our encryption-based financial system' and urged an early transition. For a decade, the answer to the quantum threat was to wait for NIST. That wait ended on 13 August 2024, when the U.S. standards body finalised its first three post-quantum encryption algorithms: CRYSTALS-Kyber for key exchange and CRYSTALS-Dilithium and SPHINCS+ for digital signatures. NIST urged system administrators to 'begin transitioning as soon as possible.' Those standards are now the reference set for every card scheme, processor, and bank writing 'quantum-safe' into a roadmap. Mastercard, for example, launched a Quantum Security & Communications project in 2021 and says the NIST selections will 'directly inform future network designs.' Card giants are still piloting. Visa has job listings for researchers 'who will directly influence how Visa and the broader payments industry evolve in the age of quantum computing,' hinting at an internal prototype network that swaps RSA for lattice-based keys. Mastercard runs quantum-threat drills inside its Cybersecurity Fusion Centers and has already swapped post-quantum algorithms into some internal message pipes. While U.S. firms talk pilots, China is stringing satellites. In March, the Chinese Academy of Sciences announced the first 12,800-kilometre quantum key-distribution (QKD) link between Beijing and South Africa—an experiment that leapfrogs fibre-based QKD and shows how a global, satellite-borne network might one day shield cross-border payment traffic from interception. The geopolitical implication is clear: if Beijing controls an orbital quantum backbone, it could offer 'unhackable' payment messaging to Belt-and-Road partner banks long before Visa or SWIFT finish their ground-based migrations. The payments stack is layered. Updating SSL/TLS in an API gateway is trivial compared with swapping out hardware security modules (HSMs) that live in PCI-DSS cages. Most production HSMs cannot run Kyber or Dilithium; vendors are still shipping beta firmware. Network-level revamps run into liability rules: if a post-quantum algorithm fails in the wild, who reimburses the retailer? That's why many CISOs treat quantum-safe upgrades as headline insurance—announce a pilot, reassure the board, but keep the RSA fallback until regulators force a cut-over. The Europol forum tried to puncture that complacency: it wants banks to map every cryptographic dependency by end-2025 and publish transition timetables. Sceptics argue fault-tolerant quantum machines are at least a decade away. Yet the harvest now strategy is real. Payments data—PANs, CVVs, CVCs—retain value for at least seven years, the typical validity window of a card. If quantum decryption arrives sooner than expected, terabytes of archived traffic could be replayed against tokenisation systems, revealing plaintext PANs that feed synthetic-identity fraud. Visa's fraud researchers estimate cyber-crime will cost the global economy $10.5 trillion by 2025; post-quantum vulnerabilities could add a multiplier. Small wonder regulators view proactive migration as cheaper than retrospective cleanup. QKD satellites grab headlines because they sound like Star Wars for banking. Yet QKD only solves key exchange, not bulk message encryption, and current satellites handle kilobit-per-second links—fine for diplomatic traffic, useless for VisaNet's 65,000 TPS. Most experts see satellite QKD as a niche overlay that protects the 'seed keys' used to bootstrap terrestrial networks. Still, China's leapfrogging matters. A bank that can route high-value settlement messages via an entanglement-based channel gets an edge in geopolitical trust—especially in regions where 'quantum-proof' becomes a marketing label as powerful as PCI Level 1 was in 2005. Quantum-safe payments sit at the awkward intersection of science and risk. Hype sells satellite demos and billion-dollar quantum-computer SPACs. Hope anchors R&D agendas for Google, IBM and Alibaba. But audit proof, evidence that a network will still work when Shor's algorithm becomes practical, is what regulators, auditors and cyber-insurers increasingly demand. Visa, Mastercard, and China's quantum satellite engineers are converging on the same conclusion: the time for headline insurance pilots is closing. The following compliance cycle will ask not if you have a quantum-safe plan but how far along you are on the three-phase roadmap. For payments executives, the cheapest answer is to start migrating before Q-Day headlines hit the front page—and before stolen 2024 card data meets a 2030-grade quantum decryptor. In other words, the smartest move might be to treat quantum-safe payments less like distant science fiction and more like EMV circa 2000: a heavy lift today, but table stakes tomorrow — because nobody wants their brand on the first un-quantum-proof breach.
Bloomberg
20-05-2025
- Business
- Bloomberg
Poste Italiane Could Be Partner for Digital Euro, Cipollone Says
Poste Italiane SpA could help introduce the digital euro to Italy, according to European Central Bank Executive Board member Piero Cipollone. The ECB is looking for partners to carry the project over 'the last mile' of implementation once it has been set up, Cipollone said, speaking at an online ASviS event.
CNA
15-05-2025
- Business
- CNA
ECB hopes to have political deal on digital euro by early 2026
FRANKFURT :The European Central Bank hopes to have all the political decisions in place by early next year to issue a digital euro and would then need two to three years to launch the currency, ECB board member Piero Cipollone said on Thursday. The ECB has been working on a digital version of the euro for years but progress has been slower than expected, mostly because legislation is still not in place to allow the bank to proceed. Financial upheaval in the aftermath of Donald Trump's election as the U.S. President has increased the urgency, however, as Europe relies on big U.S. firms for most digital payments, a potential financial vulnerability. "I hope to have everything done by the beginning of next year, very early next year," Cipollone told a conference when asked about the timing of the legal framework. "We need the legislation in place, and from that, two to three years will be enough to launch the digital euro." Unlike when they make a card payment by the likes of Visa or Mastercard, consumers paying with a digital would have a direct claim on the central bank and their funds would be similar in function and security as cash. It would allow customers to make direct payments both in online and offline formats. Cipollone said a key hurdle is getting a political agreement from EU member states but that could be reached before the summer. Work by the European Parliament could take somewhat longer, he added. When asked if Trump could accelerate the process, French central bank chief Francois Villeroy de Galhau, speaking at the same event, said it enhanced the ECB's determination.
