“The digital euro will further stimulate innovation and competition in retail payments,” according to the ECB president.

European Central Bank President Christine Lagarde said September’s 3.8% euro area inflation rate largely reflected high energy costs, which the ECB expects to ease next year.

Lagarde said while an energy shock is expected to keep euro-area inflation above the bank’s target through the first half of 2027, a measured policy response remains appropriate, according to a statement delivered at the IMF Annual Meetings on Saturday.

Lagarde added that meanwhile, the ECB is devising a digital euro. “In the retail space we are preparing to complement cash with its digital equivalent — the digital euro — for day-to-day payments. The digital euro will further stimulate innovation and competition in retail payments, ensuring that the continued co-existence of public and private solutions underpins Europe’s strategic autonomy in payments.”

Cointelegraph reported on Sept. 21 that the ECB had launched Pontes, a system that allows financial institutions to settle wholesale tokenized asset transactions in central bank money, providing an alternative to private settlement assets such as stablecoins.

The system initially offers a core set of services, with full implementation expected by 2028.

Related: ECB says digital euro app will exceed EU accessibility standards